5 (a) The corporation is examining how much to charge annually for such coverage. What premium should the corporation charge to break even on this policy? (2 marks) (b) As a cyclist, what is the expected value of the policy if the company charges a premium of $50? Would you consider purchasing such a policy? How do you justify your decision? (2 marks) (ii) Use the small increments formula to estimate the change in = 3! log7() when x decreases from 4.2 to 4 and y increases from 6 to 6.4. take the midpoint (4.1, 6.2) for the point to apply the derivative. (3 marks) (iii) An analyst has developed the following probability distribution for the rate of return for a common stock. Scenario Rate of return (in %) ( = ) 1 -4 0.25 2 0 0.35 3 10 0.40 (i) Calculate the expected rate of return. (1 mark) (ii) Calculate the variance and the standard deviation of the rate of return. (2 marks)