An automobile insurance company is offering a policy such that in the event of an accident, they will pay $27,000to replace a vehicle for an annual premium of $1,360per year. Suppose there is a 8.00%of policy holders being in an accident this year.

For all of the numerical questions below, express your answer in 2 decimal places and exclude all non-numerical characters (e.g. $ % , ). Also, express the negative amounts by a minus sign (e.g. -10)

a: What is the net amount the insurance company will pay after receiving the premium if a customer is in an accident?Express the amount as a negative number.

Answer:Answer

B) What is the amount the insurance company will receive if the customer is not in an accident?

Answer:Answer

C)What is the expected value of the insurance policy?

Answer:Answer

D)What is the standard deviation of the insurance policy?

Answer:Answer

E)Can we expect this to bea good policy for the insurance company if we assume that the company has no additional costs to enforce this insurance contract?

Yes, the insurance company on average will earn a profit on these insurance policies given the accident rate. Yes, the standard deviation indicates that this is not a risky policy. No the insurance company on average will make a loss on these insurance policies given the accident rate. No, the standard deviation indicates that this is a risky policy. Not enough information to answer this question.