Your Company Issues Flight Insurance

Short Answer

Your company issues flight insurance. You charge $2 and in the event of a plane crash, you will pay out $1 million to the victim or his or her family. In 1989, the probability of a plane crashing on a single trip was 0.00000165. If ten people per flight buy insurance from you, what was your approximate probability of losing money over the course of 110 million flights in 1989 Round your answer to four decimal places. [Hint: First determine how many crashes there must be for you to lose money.]