1. You are going to play the role of an insurance company. You are considering writing a contract to cover next year's health care costs for a person in exchange of a premium. Let's call her Ella. Based on previous experience with people like Ella, you think that she will need $15,000 in medical care if she becomes sick, but you also think that the probability of Ella needing care is low, 25%.
2. Calculate the expected value of Ella's health care costs.