Either be sick with the disease or perfectly healthy

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Reference no: EM13725466

Assume that there are two health states and individual can either be sick with the disease or perfectly healthy. The probability of sickness is 0.5. Income of the individual when healthy is $14,000 but the income available for consumption becomes $6,000 when sick. In this situation, the pure premium should be: a) 2,000 b) 3000, c) 4000

Reference no: EM13725466

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