Provide an Appropriate Response $\$ 250$
B: If the Company Sells Only a Few Policies

Provide an appropriate response.
-An insurance company sells an insurance policy for $1000. If there is no claim on a policy, the company makes a profit of $1000. If there is a claim on a policy, the company faces a large loss on
That policy. The expected value to the company, per policy, is $250.
Which of the following statements is (are) true? A: The most likely outcome on any single policy is a profit for the company of $\$ 250$ .
B: If the company sells only a few policies, its profit is hard to predict.
C: If the company sells a large number of policies, the average profit per policy will be close to \$250.

A) B and C
B) A and C
C) B only
D) C only

Correct Answer:

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