The Lippert Companies have been given a choice of deductibles for their auto fleet coverage. The probability of a loss over $500 is minimal for the company, and the premium per car without any deductible is $2,500. Which deductible and premium combination is optimal? (Each amount is on a per car basis.)
A) deductible $200, premium $2,000,
B) deductible $250, premium $1,700,
C) deductible $1,000, premium $1,350,
D) not enough information to answer.

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The Answer of The Lippert Companies have been given a choice of deductibles for their auto fleet coverage. The probability of a loss over $500 is minimal for the company, and the premium per car without any deductible is $2,500. Which deductible and premium combination is optimal? (Each amount is on a per car basis.)
A) deductible $200, premium $2,000,
B) deductible $250, premium $1,700,
C) deductible $1,000, premium $1,350,
D) not enough information to answer.

The Lippert Companies Have Been Given a Choice of Deductibles