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Hosted by ALEKS C Previous 1 2 3 4 5 Next Question 5 of 5 (1 point) 5.2 Section Exercise 18 Question A 33-year-old woman purchases a S200,000 term life insurance policy for an annual payment of S570. Based on a period life table for the U.S. government, the probability that she will survive the year is 0.999053. Find the expected value of the policy for the insurance company. Round to two decimal places for currency problems. Check Answer Solve It Guided Solution Link to Textbook Tables Formulas The expected value of the policy for the insurance company isS Save for Later Submit Assignment Elementary Statistics: A Brief Version 7th Ed Bluman Order Printed Version.Explanation / Answer
Solution:-
1-0.999053=0.000947*$200,000=$189.4 DOLLARS IS THE EXPECTED PAYOUT FOR EACH OF THE INSURED IN A GIVEN YEAR.
THUS THEIR PROFIT IS $579-$189.4=$389.6 FOR THE FIRST YEAR.
The expcted value of the insurance company is $389.6
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