Multiple Choice
An insurance company insures 100,000 cars in a certain area. The company has determined that on average, each year they will have to pay the following amounts for accidents in the area:
$100,000 with probability 0.0004
$50,000 with probability 0.001
$25,000 with probability 0.006
$5000 with probability 0.011
$1000 with probability 0.023
What is the company's expected payout per car each year?
A) $318.00
B) $4163.00
C) $4140.00
D) $381.60
E) $279.84
Correct Answer:

Verified
Correct Answer:
Verified
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