Based on an insurance company's past data, each year an average of 1/10 policy holders make a claim of $250, 1/150 policy holders make a claim of $5,000, and 1/500 make a claim of $27,000.

What would the insurance company have to charge per policy-holder to break even? (i.e., what the premium would have to be in order to have an expected profit of zero.)

A renters insurance policy sell for $425 annually. What is the expected profit or loss for the company per policy-holder over the course of the year?

If the company sold 675 policies what would the overall expected profit or loss be?