MY NOTES ASK YOUR TEACHER PRACTICE ANOTHER An insurance company needs to determine the annual premium required to break even for collision protection for cars with a value of $10,000. The random variable x is the claim size on these policies and the analysis is restricted to the losses $1000, $5000, and $10,000. The probability distribution of x is as shown in the table. What premium should customers be charged for the company to break even? X 0 1000 5000 10,000 P(x) 0.936 0.042 0.018 0.004 STEP 1: Solve each of the following. (Round your standard deviation to three decimal places.) E(X) = V(x ) = STEP 2: Which value is most useful for finding the break even point for the company? expected value standard deviation frequency variance random variable STEP 3: Determine the break even value. $ Need Help? Read It Submit