Question
An insurance company sells a health insurance policy that covers hospitalization expenses up to a maximum of $50,000 per year for each insured person. The
An insurance company sells a health insurance policy that covers hospitalization expenses up to a maximum of $50,000 per year for each insured person. The company charges an annual premium of $1,200 for this policy. The probability that a person will be hospitalized in a given year is 0.05. The company expects to sell this policy to 500 individuals. What is the expected profit or loss for the insurance company?
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Statistics The Art And Science Of Learning From Data
Authors: Alan Agresti, Christine A. Franklin
3rd Edition
9780321849281, 321755944, 321849280, 978-0321755940
