What premium should insurance company charge each season

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Reference no: EM13128406

A race car driver wishes to insure his car for the racing season for $50000. The insurance company estimates a total loss may occur with probability 0.002, a 50% loss with probability 0.01, and a 25% loss with probability 0.1 ignoring all other losses what premium should the insurance company charge each season to realize an average profit of $500.

Reference no: EM13128406

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