An insurance company will insure a $220,000 home for its

Last updated: 7/19/2022

An insurance company will insure a $220,000 home for its total value for an annual premium of $510. The company spends $30 per year to service such a policy, and the probability of total loss for such a home in a given year is 0.001. Assuming that either total loss or no loss will occur, what is the company's expected annual gain (or profit) on each such policy? -$220 $260 $290 $210