Find the Expected Value

question 64

Multiple Choice

Find the expected value.
-An insurance policy sells for $750. Based on past data, an average of 1 in 80 policyholders will file a $10,000 claim, an average of 1 in 140 policyholders will file a $20,000 claim, and an average of 1 in
200 policyholders will file a $50,000 claim. What is the expected value to the company per policy
Sold?

• A)$232
• B)$518
• C)$258
• D)$262

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Definitions:

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Data related to financial transactions and status of a business, organization, or individual, which is used for planning, reporting, decision-making, and managing financial performance.