A company offers a flood insurance policy that costs a homeowner $200 per year, and the company will make a payout of $100,000 t
o the homeowner if they have a flood in that year. The company set this price based on the probability of a flood in the area being 0.001. The table below displays the probability distribution of X=X= the company's profit from one of these policies. No flood Flood
X=profit $200 -$99,800
P(X) 0.999 0.001
Given that μX=$100, calculate σX.
You may round your answer to the nearest dollar.
The standard deviation is the square root of the multiplication of each probability multiplied by the squared difference between the values and the mean.
