Assume that you have a car worth $7300 and you wish to insure it for its full replacement value if it is stolen. If there is a 2% chance that the car will be stolen, what would a fair premium price be?
A. $133.94

B. $152.98

C. $148.98

D. $161.30

Question

Assume that you have a car worth $7300 and you wish to insure it for its full replacement value if it is stolen. If there is a 2% chance that the car will be stolen, what would a fair premium price be? 
 A. $133.94  
 
 B. $152.98  
 
 C. $148.98  
 
 D. $161.30

kropot72 · Answer

2% of $7300 = $146
Therefore a premium of less than $146 would be fair.
So the correct choice is A.