ility that he gets two matching socks? TEXAS INSTRUMENTS (d) What is the probabi

Question

ility that he gets two matching socks? TEXAS INSTRUMENTS (d) What is the probability that his socks will not match that day1 17 17 l 7 7 The Acme Travel Company sells travel insurance policies for $50. Based on past data l in 75 policyholders will file a claim for $400, 1 in 200 policyholders will file a claim for $2000, and 1 in 350 will file a claim for $5000. Find the expected value to the company per policy. If Acme sells 25000 travel policies what is the expected profit of loss for the company? 4.

Explanation / Answer

Answer:

Expected value to the company per policy = $20.38

Expected profit = 509500

Explanation:

Total value claimed = 5.33+10+14.29 = 29.62

Expected value to the company per policy = $50 - $29.62 = $20.38

Expected profit = expected value to the company per policy* number of policies

= 20.38*25000 = 509500

Value Probability Expected value claimed (=value*probability) $400 1/75 5.33 $2000 1/200 10 $5000 1/350 14.29

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