Jenny owns a home in a heavily wooded area. If there is a 1-in-25 chance...
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Finance
Jenny owns a home in a heavily wooded area. If there is a 1-in-25 chance of fire in the area, what is her expected loss given the following possible outcomes: Minor smoke damage: cost = $5,000, probability= 50% Exterior fire damage: cost = $15,000, probability= 30% Everything ruined: cost = $150,000, probability = 5% $6,800 $800 $280 $580
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