Find the Expected Value

Multiple Choice

Find the expected value.
-An insurance company will insure a $220,000 home for its total value for an annual premium of $590. If the company spends $30 per year to service such a policy, the probability of total loss for
Such a home in a given year is 0.001 and you assume either total loss or no loss will occur, what is
The company's expected annual gain (or profit) on each such policy?

A) -$220
B) $290
C) $340
D) $370