John has the following loss distribution for her medical expenses in the coming year. Medical expenses Probability $0 0.5 $500 0.3 $2,500 0.1 $10,000 0.1

a) If John has a medical expense policy with full insurance, how much would the insurer be expected to pay for the medical expenses?

b) If John has a medical expense policy with $1,200 deductible, how much would the insurer be expected to pay for the medical expenses?

c) If John has a medical expense policy with $1,000 deductible, a 30 percent coinsurance, and a $5,000 limit, how much would the insurer be expected to pay for the medical expenses?