Assume 4 in every 1000 students at the local community college have to quit due to serious health issues. An insurance company offers them $11000 policy for $50 a year. What is the amount the insurance company should expect to make on every student that pays?
prob student quits and receives $8000, thus costing the company $7950, is 0.003.
prob student doesn't quit, thereby contributing $50 to company income, is 0.997
Therefore expected receipt for company = $(0.003*(-7950) + 0.997*50) = $(49.85 - 23.85) = $26 Thank you for posting your question here at brainly. I hope the answer will help you. Feel free to ask more questions.
