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Let X be the amount in claims (in dollars) that a randomly chosen policyholder collects from an insurance company this year. From past data, the

Let X be the amount in claims (in dollars) that a randomly chosen policyholder collects from an insurance company this year. From past data, the insurance company has determined that E(X) = $72, and sigma subscript X = $60. Suppose the insurance company decides to offer a discount to attract new customers. They will pay the new customer $50 for joining and offer a 5% "cash back" offer for all claims paid. Let Y be the amount in claims (in dollars) for a randomly chosen new customer. Then Y = 50 + 1.05X. Find E(Y) . $63 $113 $13 $125.60

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