Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

i need help with this 6. Life Insurance: Your company sells life insurance. You charge a 30 year old man $25 for a one year1

i need help with this

image text in transcribed
6. Life Insurance: Your company sells life insurance. You charge a 30 year old man $25 for a one year1 $100,000 policy. If he dies over the course of the next year you pay out $100,000. If he liveeJ you keep the $25. Based on historical data {relative frequency approximation) the average 30 year old man has a 0.9999 probability of living through the year. (a) What is your expected prot on this policy? (b) What is the tweakeven price of such a policy? I.e. What price should you charge to produce an expected prot of zero

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Entrepreneurship

Authors: Andrew Zacharakis, William D Bygrave

5th Edition

1119563097, 9781119563099

Students also viewed these Mathematics questions