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Ali's Insurance Company issues a 1-year $1,000 policy insuring against an occurence of event A that historically happens to 2 out of every 100 owners
Ali's Insurance Company issues a 1-year $1,000 policy insuring against an occurence of event A that historically happens to 2 out of every 100 owners of the policy. Administrative fees are $15 per policy and are not part of the company's "profits". How much should each company charge (C = premium) for the policy if it requires that the expected profit per policy be $50?
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