Suppose a life insurance company sells a $280,000 one-year term life insurance policy to a 25-year-old female for $370. The probability that the female survives the year is 0.999514. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ (Round to two decimal places as needed.)
Suppose a life insurance company sells a $280,000 one-year term life insurance policy to a 25-year-old female for $370. The probability that the female survives the year is 0.999514. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ (Round to two decimal places as needed.)
College Algebra
7th Edition
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter9: Counting And Probability
Section9.4: Expected Value
Problem 20E
Related questions
Question
Transcribed Image Text:K
12:03
Suppose a life insurance company sells a $280,000 one-year term life insurance policy to a 25-year-old female for
$370. The probability that the female survives the year is 0.999514. Compute and interpret the expected value of this
policy to the insurance company.
The expected value is $.
(Round to two decimal places as needed.)
|||
=
C...
VO) 1
LTE2.II 4G .
O
35%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
College Algebra
Algebra
ISBN:
9781305115545
Author:
James Stewart, Lothar Redlin, Saleem Watson
Publisher:
Cengage Learning
Calculus For The Life Sciences
Calculus
ISBN:
9780321964038
Author:
GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:
Pearson Addison Wesley,
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage
College Algebra
Algebra
ISBN:
9781305115545
Author:
James Stewart, Lothar Redlin, Saleem Watson
Publisher:
Cengage Learning
Calculus For The Life Sciences
Calculus
ISBN:
9780321964038
Author:
GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:
Pearson Addison Wesley,
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage
College Algebra (MindTap Course List)
Algebra
ISBN:
9781305652231
Author:
R. David Gustafson, Jeff Hughes
Publisher:
Cengage Learning
Holt Mcdougal Larson Pre-algebra: Student Edition…
Algebra
ISBN:
9780547587776
Author:
HOLT MCDOUGAL
Publisher:
HOLT MCDOUGAL