Posted by **Melissa** on Saturday, May 22, 2010 at 4:23pm.

An actuary at an insurance company estimates from exsiting data that on a $1000 policy an average 1 and 100 policyholders will file a 20000 claim. in average of 1 in 200 policyolders will file a 50000 claim in average 1 in 500 policyholders will file a 100000 claim.

a. what is the expected value to the company for each policy sold.

b. if the company sells 100000 policies can it expect a profit. explain your assumptions of this calculation.

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