Andy and bobbi each have a job that pays 100000 per year


Andy and Bobbi each have a job that pays $100,000 per year. Andy has a 5% chance of contracting an illness that would allow him to only make $60,000 next year while Bobbi has a 10% chance. (i) calculate each person's expected income for next year. (ii) if each could insure against an income reduction in the event of illness, calculate the actuarially fair insurance premium for each.

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Business Economics: Andy and bobbi each have a job that pays 100000 per year
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