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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.
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