An insurance policy costs $150 per year,and will pay policyholders $16,000 if they suffer a major injury (resulting in hospitalization)or $6000 if they suffer a minor injury (resulting in lost time from work).The company estimates that each year 1 in every 2000 policyholders will have a major injury and 1 in every 400 a minor injury.What is the standard deviation of the company's profit on this policy?
A)$582.92
B)$466.34
C)$447.68
D)$498.98
E)$550.28

Question

Quizplus · Accepted Answer

The Answer of An insurance policy costs $150 per year,and will pay policyholders $16,000 if they suffer a major injury (resulting in hospitalization)or $6000 if they suffer a minor injury (resulting in lost time from work).The company estimates that each year 1 in every 2000 policyholders will have a major injury and 1 in every 400 a minor injury.What is the standard deviation of the company's profit on this policy?
A)$582.92
B)$466.34
C)$447.68
D)$498.98
E)$550.28

An Insurance Policy Costs $150 Per Year,and Will Pay Policyholders