Question

An insurance policy sells for $800. Based on past data, an average of 1 in 50

policyholders will file an $8,000 claim, an average of 1 in 100 policyholders will file
a $20,000 claim, and an average of 1 in 250 policyholders will file a $50,000 claim. Find
the expected value to the company per policy sold.

Answer 1

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