Problem of statistics probability

Reference no: EM1399319

From past experience, an automobile insurance company knows that a given automobile will suffer a total loss with probability .02, a 50% loss with probability .08, or a 25% loss with probability .15 during a year. What annual premium should the company charge to insure a $10,000 automobile, if it wishes to "break even" on all policies of this type? (Assume there will be no other partial loss)

Reference no: EM1399319

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