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2. Now, another insurance company B offers disability insurance for the next 10 years. The contract is described as follows: there is a 10% probability

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2. Now, another insurance company B offers disability insurance for the next 10 years. The contract is described as follows: there is a 10% probability that Anderson will have an accident that will call for$5,{JUU. A and B decide to pool together and each agrees to pay 2/ 3 and 1 3 of any loss that [Ill ht occur. In addition A and B are independent. Anderson ecided to get t e new disability insurance. (a) How much is this new contract expected to cost to the insurance company if the interest rate is 5% (h) Without taking into account the time vaiue of money, compute the expected to cost and risk of the contract

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