An Insurance Company Estimates That It Should Make an Annual

question 48

Multiple Choice

An insurance company estimates that it should make an annual profit of $140 on each homeowner's policy written,with a standard deviation of $5500.If it writes 10,000 of these policies,what are the mean and standard deviation of the annual profit? Assume that policies are independent of each other.

• A)μ = $14,000.00,σ = $550,000.00
• B)μ = $1,400,000,σ = $550,000,000,000
• C)μ = $1,400,000,σ = $550,000.00
• D)μ = $1,400,000,σ = $55,000,000
• E)μ = $14,000.00,σ = $55,000,000

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Definitions:

GDP

Gross Domestic Product, a measure of the economic performance of a nation, representing the total value of all goods and services produced over a specific time period.

Imports

are goods and services brought into one country from another for the purpose of trade or sale, contributing to a country's supply of products not locally produced.

Exports

Goods, services, or commodities sent from one country to another country for sale or trade.

Hourly Wages

The sum of money received for every hour worked.