Question
A 40-year-old man in the U.S. has a 0.244% risk of dying during the next year . An insurance company charges $260 per year for
A 40-year-old man in the U.S. has a 0.244% risk of dying during the next year . An insurance company charges $260 per year for a life-insurance policy that pays a $100,000 death benefit. What is the expected value for the person buying the insurance? Round your answer to the next dollar.
Step by Step Solution
3.40 Rating (156 Votes )
There are 3 Steps involved in it
Step: 1
Given Let D be event of dying PD 0248 000248 PD 1 PD 099752 Policy premium 300 P...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Microeconomics
Authors: Paul Krugman, Robin Wells
3rd edition
978-1429283427, 1429283424, 978-1464104213, 1464104212, 978-1429283434
