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An insurance company knows that the average cost to build a home in a new California subdivision is $92,840 and that in any particular year there is a 1 in 44 chance of a wildfire destroying all the homes in the subdivision. Based on these data and assuming the insurance company wants a positive expected value when it sells policies, what is the minimum the company must charge for fire insurance policies in this subdivision?

User Zach
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1 Answer

26 votes
26 votes

Step 1

Given;


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User Guttsy
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