There Is an 80% Probability That Tom Will Be in Good

question 54

Multiple Choice

There is an 80% probability that Tom will be in good health during the year and incur only $200 in medical expenses, but there is a 20% probability that he will be ill and incur $20,000 in medical expenses. If an insurance company charged Tom an actuarially fair premium, how much would Tom pay for health insurance?

• A) $3,840
• B) $4,000
• C) $4,160
• D) $3,460

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Definitions:

Human Activities

Actions and behaviors performed by humans that impact the environment, society, and economy.

Microbial Species

A group of microorganisms, which share similar genetic characteristics and can interbreed, forming a distinct group within a genus.

Lineages

Sequences of species that are descended from a common ancestor, reflecting the evolutionary history of the species.

Bryozoan Lineages

The evolutionary branches representing the diverse groups within the Bryozoa phylum, small aquatic invertebrate animals.