An Insurance Company Estimates That It Should Make an Annual

question 67

Multiple Choice

An insurance company estimates that it should make an annual profit of $150 on each homeowner's policy written,with a standard deviation of $6000.If it writes 7 of these policies,what are the mean and standard deviation of the annual profit? Assume that policies are independent of each other.

• A)μ = $396.86,σ = $42,000
• B)μ = $1050,σ = $294,000
• C)μ = $1050,σ = $42,000
• D)μ = $1050,σ = $15,874.51
• E)μ = $396.86,σ = $15,874.51

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