can you check if my answer to this question is right
ben bought a new car. there is a 5% chance that a car gets severely damaged within the first five years of purchase. If your car gets severely damaged, your estimated loss is $50,000.
he has the option of buying a premium insurance plan that can cover the loss if your car gets severely damaged within the next five years. The insurance plan costs $2,000 total and it covers his loss with 95% probability. what is the expected loss and standard deviation if he get the insurance plan and if he doesn’t buy the plan ?
my answers :
if he doesn’t get the plan
expected loss = -2500
and standard deviation = 10897.25
if he get the plan
expected loss= -1900
standard deviation= 435.89