An insurance company issues a 1-year $1000 policy insuring against an occurrence A that historically happens to 2 out of every 100 owners of the policy. Administrative fees are $15 per policy and are not part of the company’s "profit". How much should the company charge for the policy if it requires that the expected profit per policy be $50? (Hint: If C is the premium for the policy, the company’s "profit" is C – 15 if A does not occur and C – 15 – 1000 if A does occur.)

$85

Step-by-step explanation:

For the insurance company mentioned in the question above, we have:

Outcome              AA_cc         AA

Profit (X)                CC-15      CC-15-1000

p(x)                   1-0.02=0.98       0.02

Therefore, we can deduce that the expected profit will be equivalent to:

E(X) = (CC-15)*0.98 +(CC-15-1000)*0.02 = 50

0.98CC-14.7+0.02CC-0.3-20 = 50

0.98CC+0.02CC = 50+14.7+0.3+20 = 85

CC = $85

Thus, the insurance company should charge $85 for the policy to obtain the estimated expected profit.  

your answer is b ^w^ hope i

answer:

it is general formula that is used to write value to its excet position

a11 a12 a13

a21 a22 a23

it is the example of order 2 by 3 matrix in this

a11 means value occur in 1 st row 1st column

a12 means value occurs in 1st row 2nd column

a13 means value occur in 1st row and 3rd column

a21 means value occurs in 2nd row and 1st column

a22 means value occurs in 2nd row and in 2nd column

a23 means value occurs in 2nd row and in 3rd column