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Total claims from the two full coverage policies

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Reference no: EM132169153

Fred and Wilma have identical and independent risks. Specifically, each of them faces a risk which has $200 of expected loss and $500 of standard deviation. If the insurer sells them a full coverage policy at the fair premium, what is the expected value and the standard deviation of total claims from the two full coverage policies (i.e., the sum of claims from Fred and Wilma)?

Reference no: EM132169153

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