There is a 0.9991 probabilty that a randommly selected 33-year-old male lives th

Question

There is a 0.9991 probabilty that a randommly selected 33-year-old male lives through the year. A lfe insurance company charges $188 for insuring that the male ill live through the year. If the male does not survive the year, the policy pays out $110,000 as a death benefit. Complete parts (a) through (c)below a. From the perspective of the 33-year-old male, what are the monetary values coresponding to the two events of surviving the year and not surviving? The value corresponding to sureng the years The value oorresponding to not surviving the year is (Type integers or decimals. Do not round

Explanation / Answer

Ans:

a)

The value corresponding to surviving this year is=188

The value correspondint to not surviving th year is =188-110,000=-109812

b)Expected value for the insurance company:

E(x) = 0.9991*188 + 0.0009*(-109812) = 89

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.