An Automobile Insurance Company Estimates the Following Loss Probabilities for the Next

question 34

Essay

An automobile insurance company estimates the following loss probabilities for the next year on a $25,000 sports car: $$\begin{array} { l l } \text { Total loss: } & 0.001 \\50 \% \text { loss: } & 0.01 \\25 \% \text { loss: } & 0.05 \\10 \% \text { loss: } & 0.10 \\\text { No loss: } & 0.839\end{array}$$ Assuming the company will sell only a $500 deductible policy for this model (i.e., the owner covers the first $500 damage), how much annual premium should the company charge in order to average $620 profit per policy sold? 2 Find Mean, Variance, Standard Deviation

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Definitions:

Osmotic Thirst

Osmotic thirst is a sensation of thirst aroused by a high concentration of solutes in the body's fluids, leading to a drive to consume water to dilute these solutes.

Water Intoxication

A potentially fatal disturbance in brain function that results when the normal balance of electrolytes in the body is pushed outside safe limits by overhydration.

Dehydrated

A state in which the body loses more fluids than it takes in, leading to an imbalance of water and electrolytes.

Irregular Heartbeat

A condition where the heart's natural rhythm is disrupted, leading to irregularities in heart rate or rhythm.