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In Manama, ABC Insurance covered 5,000 commercial spaces for 2021. The company estimates that there is a 2% chance of loss caused by any peril

In Manama, ABC Insurance covered 5,000 commercial spaces for 2021. The company estimates that there is a 2% chance of loss caused by any peril in the area covered. In addition, per historical data, 350 to 120 buildings experience some form of loss in a year.

a. What is the expected value of loss?

b. What is the objective risk of the area covered by ABC?

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