An insurance company will insure a modest house for $500,000 against complete destruction from fire for a premium of $700 a year. Suppose that the probability that the house will be destroyed by fire in a given year is .0005. Let X denotes the annual profit of the insurance profit. a) Give the probability distribution of the profit X in the tabular form. b) Calculate the insurance company’s expected profit. c) Find the annual premium that the company should charge if it wants its expected profit to be $600.

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An insurance company will insure a modest house for $500,000 against complete destruction from fire for a premium of $700 a year. Suppose that the probability that the house will be destroyed by fire in a given year is .0005. Let X denotes the annual profit of the insurance profit. a) Give the probability distribution of the profit X in the tabular form. b) Calculate the insurance company’s expected profit. c) Find the annual premium that the company should charge if it wants its expected profit to be $600.

Mathematics
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At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.

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