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expeople1 [14]
3 years ago
11

8. Teddy is considering buying flood insurance. The cost of flood insurance is $400 per year. Teddy predicts

Mathematics
2 answers:
spayn [35]3 years ago
7 0

Answer:

The expected losses are $200 per year

Step-by-step explanation:

Expected payoff from flood insurance is:

income*probability of flood

$ 1000 * 0.20 = $ 200

But his insurance costs $400 per year, then he will loss: $ 400 - $ 200 = $200 per year.

adell [148]3 years ago
4 0

Answer:

A. - $200 is correct ! :)

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