An Insurance Company Will Insure a $75,000 Hummer for Its

question 32

Multiple Choice

An insurance company will insure a $75,000 Hummer for its full value against theft at a premium of $1500 per year.Suppose that the probability that the Hummer will be stolen is 0.0075. Find the premium that the insurance company should charge if its wants it's expected net profit to be $2000?

• A)$1437.50
• B)$2551.25
• C)$2562.50
• D)$2062.50

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Definitions:

Criminal Record

A documented history of a person's criminal convictions, which can affect future employment, travel, and citizenship opportunities.

Erving Goffman

A sociologist known for his work on symbolic interactionism and the study of social interactions, especially in the context of everyday life.

Passing

The ability of an individual to be regarded as a member of an identity group or demographic other than their own, often based on appearance.

Criminal Justice System

A collection of social institutions, such as legislatures, police, courts, and prisons, that creates and enforces laws.