An Insurance Company Will Insure a $75,000 Hummer for Its

question 135

Multiple Choice

An insurance company will insure a $75,000 Hummer for its full value against theft at a premium of $1500 per year.Suppose that the probability that the Hummer will be stolen is 0.0075.Calculate the expected net profit for the insurance company.

• A)$937.50
• B)$551.25
• C)$1488.75
• D)$562.50

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Definitions:

US

Refers to the United States, a country located primarily between Canada and Mexico, composed of 50 states, a federal district, five major self-governing territories, and various possessions.

CS

Acronym for Conditioned Stimulus, a previously neutral stimulus that, after being associated with an unconditioned stimulus, elicits a conditioned response.

Adaptability

The ability to adjust to new conditions or environments, demonstrating flexibility and resilience.

Cognition

Gaining understanding and knowledge through the processes of thought, life experiences, and sensory engagement.