An Insurance Company Will Insure a $75,000 Particular Make and Model

Multiple Choice

An insurance company will insure a $75,000 particular make and model of car for its full value against theft at a premium of $1,500 per year. Suppose that the probability that this particular automobile make and model will be stolen is .0075. Calculate the expected net profit for the insurance company.

A) $937.50
B) $551.25
C) $1488.75
D) $562.50