Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I miss this question Suppose a life insurance company sells a $210,000 one-year term life insurance policy to a 20-year-old female for $280. The probability

I miss this question

image text in transcribed
Suppose a life insurance company sells a $210,000 one-year term life insurance policy to a 20-year-old female for $280. The probability that the female survives the year is 0.999646. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ 205.66'. (Round to two decimal places as needed.) Which of the following interpretation of the expected value is correct? A. The insurance company expects to make an average prot of $18.70 on every 20-year-old female it insures for 1 month. LX B. The insurance company expects to make an average prot of $279.90 on every 20-year-old female it insures for 1 year. * C. The insurance company expects to make an average prot of $205.66 on every 20-year-old female it insures for 1 year. D. The insurance company expects to make an average prot of $25.45 on every 20-year-old female it insures for 1 month

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Business Mathematics With Canadian Applications

Authors: Ali R. Hassanlou, S. A. Hummelbrunner, Kelly Halliday

12th Edition

0135285011, 978-0135285015

More Books

Students also viewed these Mathematics questions

Question

Explain exothermic and endothermic reactions with examples

Answered: 1 week ago

Question

Write a short note on rancidity and corrosiveness.

Answered: 1 week ago