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QUESTION
Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest to Moria. Based on past experience, the...
Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest to Moria. Based on past experience, the probability of surviving such a quest is 96.4%. If BIC charges a premium of 7,000 silver coins and would pay a death benefit of 91,000 silver coins if the insured were to die, what is the expected value of this insurance policy to BIC?
