Recently a company brought a miniature version of its cereal bars to market. The nugget-sized product was very successful because it was not messy. Another company then introduced a similar product under its own brand. Mini-cereal bars are most likely in the stage of their product life cycle.

An insurance company estimates the probability of an earthquake in the next year to be 0.0015. the average damage done to a house by an earthquake it estimates to be $90,000. if the company offers earthquake insurance for $150, what is company`s expected value of the policy? hint: think, is it profitable for the insurance company or not? will they gain (positive expected value) or lose (negative expected value)? if the expected value is negative, remember to show "-" sign. no "+" sign needed for the positive expected value