4. An insurance company has determined that for a group of 10,000 people that it insures the

expected loss per person covered is $8,000 per year. It sells the insurance policy for $10,000 per year.

(a) What is the actuarially fair premium for this policy?

(b) What is the loading factor for this insurance policy?

(c) Is the loading factor the same as the profit the insurance company makes on the policy?

Explain.