A midsize corporation is considering purchase of Cyber Liability Insurance Policy. The following table provides the probability distribution of yearly cost coverage associated with different level of Cyber Security IT network interruptions for this corporation. Type of Risks Probability Cost Coverage None 0.90 $0 Minor: A: (Loss or Damage to Electronic Data) 0.050 $70,000 Moderate: A + B (Loss of Income and Extra Expenses 0.030 $500,000 Major: A+B+ C (Cyber Extortion) 0.019 $2,000,000 Catastrophic: A+B+C+D (loss of reputation & credit monitoring of all affected) 0.001 $10,000,000

a- What is the expected cost of this policy for the insurance company? What is the Standard deviation of cost? Hint: Use Excel.

b- If the cost of purchasing a network interruption insurance is $100,000, calculate the expected gain or loss for a corporation that purchase this insurance. Would you recommend purchasing this insurance? Why?

c- Would you a buy this insurance policy at cost of $50,000? Why?

I completed the part A which I attached below. I only need part B and C to be answered. Thank you

Problem 4 Type of Risks None Probability P(x) Cost Coverage X 0.9 X*P(X) (X-mean)^2*P(x) $0 $159,201,000 $0 Minor: A: (Loss or Damage to Electronic Data) 0.05 $70,000 $3,500 $160,744,500 Moderate: A + B (Loss of Income and Extra Expenses 0.03 $500,000 $15,000 $7,106,306,700 Major: A+B+C (Cyber Extortion) 0.019 $2,000,000 $38,000 $74,992,560,910 0.001 $10,000,000 $99,734,176,890 Catastrophic: A+B+C+D (loss of reputation & credit monitoring of all affected) Total: $10,000 $66,500 A) Mean = $13,300 Variance $182,152,990,000 Standard Deviations 426793.8495 Problem 4 Type of Risks None Probability P(x) Cost Coverage X 0.9 X*P(X) (X-mean)^2*P(x) $0 $159,201,000 $0 Minor: A: (Loss or Damage to Electronic Data) 0.05 $70,000 $3,500 $160,744,500 Moderate: A + B (Loss of Income and Extra Expenses 0.03 $500,000 $15,000 $7,106,306,700 Major: A+B+C (Cyber Extortion) 0.019 $2,000,000 $38,000 $74,992,560,910 0.001 $10,000,000 $99,734,176,890 Catastrophic: A+B+C+D (loss of reputation & credit monitoring of all affected) Total: $10,000 $66,500 A) Mean = $13,300 Variance $182,152,990,000 Standard Deviations 426793.8495