An individual owns a $100,000 home. She determines that her chances of suffering a fire in any given year to be 1/1000 (0.001). She correctly calculates her expected loss in any year to be
$100. Explain why this really isn't a good way to measure her potential for loss.

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The Answer of An individual owns a $100,000 home. She determines that her chances of suffering a fire in any given year to be 1/1000 (0.001). She correctly calculates her expected loss in any year to be
$100. Explain why this really isn't a good way to measure her potential for loss.

An Individual Owns a $100,000 Home