Loss probabilities for a year

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Reference no: EM1311436

An automobile insurance company estimates the following loss probabilities for the next year on a $25,000 sports car:

Possible losses	probabilities
Total loss	0.001
50% loss	0.01
25% loss	0.05
10% loss	0.10

How much annual premium should the company charge in order to average $600 profit per policy sold?

Reference no: EM1311436

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