# Stor

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It would be quite risky for you to insure the life of a 25-year-old friend . There is a high probability that your friend would live and you would gain \$875 in premiums. But if he were to die, you would
lose almost \$100,000. Explain carefully why selling insurance is not risky for
an insurance company that insures many thousands of 25-year-old men.

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