An insurance policy costs $100 and will pay policyholders $10,000 if they suffer a major injury ...

An insurance policy costs $100 and will pay policyholders $10,000 if they suffer a major injury or $3,000 if they suffer a minor injury. The company estimates that each year 1 in every 2,000 policyholders may have a major injury, and 1 in 500 a minor injury only.

a) Create a probability model for the profit on a policy.

b) What's the company's expected profit on this policy?

c) What's the standard deviation?