Question

An insurance policy costs ​$130 and will pay policyholders ​$12 comma 000 if they suffer a...

An insurance policy costs

​$130

and will pay policyholders

​$12 comma 000

if they suffer a major injury​ (resulting in​ hospitalization) or

​$2000

if they suffer a minor injury​ (resulting in lost time from​ work). The company estimates that 1 in every

2022

policyholders will suffer a major injury and that 1 in

540

will suffer a minor injury.

​a) Create a probability model for the profit on a policy.

​b)​ What's the​ company's expected profit on the​ policy?

​c)​ What's the standard​ deviation?

Math   Statistics-And-Probability   
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