The homework should be in an Excel form and to be submitted via Ritaj and file name format includes your names like this Habib_Hinn_Iyad_Jabr.xlsx No other forms would be accepted.

Assume that four business owners each own an identical storage building valued at 300,000$.

Assume that there is a 4% chance in any year each building will be destroyed by a peril (fire), and that a loss to any of the buildings is an independent event. Assumuing that:

(1) Fire events are independent of each other

(2) Each building faces same types of risks and environmental conditions.

Given that, Answer the following questions:

A. Use the compound probability of independent events law to find the sample space of the probability of each possible event

B. Find the annual expected loss for each of the insureds.

C. Find the risk of incurrence of losses (Std dev)

D. Explain what happens to the objective risk with the addition of more individuals

E. Explain what happens to the expected loss with the addition of more individuals

F. Explain the importance of law of large numbers to predict expected losses.