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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.

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