How much can the company be expected to gain

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While booking a passenger ship, a person can pay only $1.00 for a $100,000 life insurance policy covering the duration of the ship. More precisely, the insurance company makes a payment of $100,000 if the insured person dies from a possible ship crash; else the company gains $1.00 (before expenses). Supposing that past records suggest that 0.45 deaths happen per 1,000,000 passengers. How much can the company be expected to gain on 100,000 such policies?

Reference no: EM132367464

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