An insurance policy costs $130 and will pay policyholders $8,000 if they suffer a major injury (resulting in hospitalization) or $3500 if they suffer a minor injury (resulting in lost time from work). The company estimates that 1 in every 1907 policyholders will suffer a major injury and that 1 in 497 will suffer a minor injury.
a) whats the company's expected profit on the policy?
b) What's the standard deviation?