1) An insurance company sells a one-year automobile policy with a deductible of 2. The probability that the insured will incur a loss is 0.05. If there is a loss, the probability of a loss of amount N...

Extracted text: 1) An insurance company sells a one-year automobile policy with a deductible of 2. The probability that the insured will incur a loss is 0.05. If there is a loss, the probability of a loss of amount N is K 'N for N = 1, .., 8 and K a constant. These are the only possible loss amounts and no more than one loss can occur. Determine the net premium for this policy.