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- October 1st 2006, 06:53 AM #1

- Joined
- Oct 2006
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- 4

## Question

An insurance company writes a policy such that an amount of money A must be paid if some event E occurs within a year. If the company has estimated that event E will occur within a year with probability p, how much should the company charge its customer so that its expected profit will be 10% fo A?

Does anyone know how to approach this question?