​Suppose the insurance company cannot tell them apart but expects them to be different values and charges them an average premium of $1850. How much profit would it make?

A) ​$1850
B) Zero-they would break even
C) They would make a loss of $650
D) ​They would make a loss of $1100

The expected loss for Nadia is $1000 (10% of $10,000) and for Samantha, it is $2500 (25% of $10,000). The insurance company is charging an average premium of $1850 which is lower than the expected loss for Samantha but higher than the expected loss for Nadia. Therefore, they would make a loss as they are charging less than the expected loss for one of the customers.
The total expected loss for both customers is $3500 ($1000 for Nadia and $2500 for Samantha). If the insurance company charged each customer their expected loss plus $100, they would make a profit of $700 ($1100 from Nadia and $1600 from Samantha). Charging an average premium of $1850 is not profitable for them.