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: Neighborhood Insurance sells fire insurance policies to localhomeowners. The premium is $110, the probability of a fire is 0.1%,and in the event of a
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Neighborhood Insurance sells fire insurance policies to localhomeowners. The premium is $110, the probability of a fire is 0.1%,and in the event of a fire, the insured damages (the payout on thepolicy) will be $100,000.f. Continue to assume the company has issuedtwo policies, but now assume you take on a partner, so that youeach own one-half of the firm. Make a table of your share of thepossible payouts the company may have to make on the two pol...
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