Mathematics, 07.12.2020 17:40, grettelyesenia

Suppose a company charges an annual premium of $475 for a fire insurance policy. In case of a fire claim, the company will pay out an average of $100,000. Based on actuarial studies, it determines that the probability of a fire claim in a year is 0.004. What is the expected annual profit of a fire insurance policy for the company? What annual profit can the company expect if it issues 1000 policies?

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Suppose a company charges an annual premium of $475 for a fire insurance policy. In case of a fire c...