The premium that the insurance company should charge each year to realize an average profit of $500 is $6,900.
First step is to calculated the expected amount to pay
Expected amount=Total loss +50% loss+25% loss
Expected amount=$200,000(0.002)(1)+$200,000(0.01)(0.5)+$200,000(0.1)(0.25)
Expected amount=$400+$1,000+$5,000
Expected amount=$6,400
Second step is to calculate the premium
Premium=Expected amount+ Average profit
Premium=$6,400+$500
Premium=$6,900
Inconclusion the premium that the insurance company should charge each year to realize an average profit of $500 is $6,900.
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Based on the payoffs and the probabilities given, we can calculate the mean to be <u>0.8 shots made. </u>
<h3>What is the mean?</h3>
The mean in this scenario will be a weighted average of the probabilities that a number of shots will be made.
The mean will be:
<em>= ∑ (Number of shots x Probability of number of shots)</em>
= (0 x 0.36) + (1 x 0.48) + (2 x 0.16)
= 0.8 shots
In conclusion, the mean is 0.8 shots.
Find out more about weighted average at brainly.com/question/18554478.
The answer should be c)4.8