Question

QUESTION 10 of 10: You pay $1,000 for your insurance policy that covers up to $1 million in losses. If the insurance company just broke even
on similar policies, which of the following is closest to the odds the insurance company assumes for your making a claim of $1 million?
оооо
O a) 1 in 2
Ob) 1 in 5
c) 1 in 50
d) 1 in 1,000

Answer 1

It’s definitely c if not my bad

Answer 2

Answer:

It's D - 1 in 1,000

Step-by-step explanation:

If the company breaks even, it collects $1,000,000 and pays out $1,000,000. If it collects $1,000 from each company, that means it sold $1,000,000 / $1,000 = 1,000 policies, and it paid out on one of them. This means the expected odds are 1 in 1,000.