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Insurance: An insurance company sells a 1-year term life insurance policy to an 85 -year-old woman. The woman pays a premium of $2600. If she
Insurance:An insurance company sells a 1-year term life insurance policy to an 85
-year-old woman. The woman pays a premium of $2600. If she dies within 1 year, the company will pay $88,000
to her beneficiary. According to the U.S. Centers for Disease Control and Prevention, the probability that an
85-year-old woman will be alive 1 year later is 0.9714.
Let X
be the profit made by the insurance company.
Part 1 of 2
(a) Find the probability distribution. The probability distribution is
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