3. An insurance company sells a $150,000 tornado insurance policy to a resident of Lawrence, Kansas, for $1,000 (NOTES: $150,000 represents what the company pays the resident if a tornado occurs and $1,000 represents what is called the policy's premium) a. If the company estimates the probability a tornado hits Lawrence over the time period, or duration of the policy equals 0.005, what is the company's expected loss or profit on the policy? b. What is lowest premium the company can charge the resident, yet not lose money (the so-called breakeven premium)