The Baker Family Is Faced with Two Possible States

True/False

The Baker family is faced with two possible states.In state 1,they remain healthy and incur no medical expenses.In state 2,their medical expenses will be $8,000.There is a 30% chance that state 1 will occur and a 70% chance that state 2 will occur.An insurance company offers to pay all of their medical expenses for a premium of $6,000.From the Bakers' point of view,this is a fair insurance policy.