Expected profit per policy

by | Jul 27, 2021 | Homework Help

Insurance companies use probability and expected value to determine their rates. Suppose that 250,000 out of 1,000,000 drivers between the ages of 18 and 22 had a car accident. If the average accident cost the insurance company $1,500 and the insurance company charges $800 for an insurance policy, what is the company’s expected profit per policy?

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