Average spending, Average spending is $2,560. Those with a

Average spending

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Average spending is $2,560. Those with a family history of cancer (4% of the population) spend $40,000 on average, and those with no family history (96% of the population) spend $1,000. Which of the following statements are true?

You buy insurance because it protects you from the risk of high spending

You buy coverage because your expected loss is larger than the premium

You don't buy coverage because your expected loss is smaller than the premium

You are indifferent because your expected loss is $2,560

Reference no: EM13893269

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