Scenario: Flood Area Suppose you own a home that is estimated to be worth $250,000.You live in a potential flood area; as a result, the probability that you will lose your home to a flood is 30%.
(Scenario: Flood Area) Look at the scenario Flood Area.A flood may occur, causing you to
Lose your entire home.In this case, your expected loss resulting from the flood would be:
A)$250,000.
B)$75,000.
C)$15,000.
D)$100,000.

Question

Quizplus · Accepted Answer

The expected loss can be calculated by multiplying the value of the home by the probability of losing the home to a flood. Expected loss = $250,000 x 30% = $75,000. Therefore, the best choice is B.

Scenario: Flood Area Suppose You Own a Home That Is