3. You are considering the purchase of a simple insurance policy on your home. The annual premium is $1,500. For this simplified example, let's assume that the probability of no loss occurring during the policy year is 95%. In that case, your net financial benefit is the full premium amount, so the net impact is -$1,500. The probability of a small loss ($1,000) is 396, in which case your net financial impact would be -$500 (the premium you paid plus the loss the policy covers) ( $1,500 $1,000). The probability of a moderate loss ($10,000) is 1.8%. The probability of a total loss ($400,000) is 0.2% What is the expected value of the net financial impact for you? (show calculations) Would you buy a policy like this? Why? How is this different from the raffle in problem #2? For the insurance company, the financial impact is the premium they collect from you