Question 8 of 8 (1 point) View problem in a pop-up Insurance: An insurance compa

Question

Question 8 of 8 (1 point) View problem in a pop-up Insurance: An insurance company sells a 1-year term life insurance policy to an 81-year-old woman. The woman pays a premium of S3500. If she dies within 1 year, the company will pay S64,000 to her beneficiary. According to the U.S. Centers for Disease Control and Prevention, the 6.1 Section Exercise 58 probability that an 81-year-old woman will be alive 1 year later is 0.9457. Letk be the profit made by the insurance company. Part 1 out of 2 Find the probability distribution. The probability distribution is 3500 P(x) 8

Explanation / Answer

Result:

a).

part1

64000-3500 = 60500

x

-60500

3500

P(x)

0.0543

0.9457

Part2

Total

x

-60500

3500

P(x)

0.0543

0.9457

xP(x)

-3285.15

3309.95

24.8

Expected value for the company = $24.80

Or

Profit for the company $24.80

x

-60500

3500

P(x)

0.0543

0.9457

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