a Secure I https:/ Ptestid- 1836972 18/PS-MAT-123-C1 Statistics I A 6/8118 10:05

Question

a Secure I https:/ Ptestid- 1836972 18/PS-MAT-123-C1 Statistics I A 6/8118 10:05 AM Test: Chapter 5 Post-Test (Callahan) This Question: 1 pt Submit Tes This Test: 10 pts possible There s a 0 9991 probability that a randomly selected 29 year-oid male ives hrough the year A life insurance company charges $100 for imsuring that the male wil liwe through the year. If the male does not survive the year, the policy pays out $80,000 a. From the perspective of the 29, year-oid male, what are the monetary values corresponding to the two events of sunvining The value corresponding to surviving the year is s as a death benefit. Complete parts (a) through (c) below the year and not surviving? The value corresponding to not surviving the year is (Type integers or decimals. Do not round.) b. If the 29-year-old male purchases the policy, what is his expected value? The expected value is s (Round to the nearest cent as needed) c. Can the insurance company expect to make a profit from many such policies? Why? because the insurance company expects to make an average profit of Son every 29-year -old male it insures for 1 year (Round to the nearest cent as needed)

Explanation / Answer

a)value corresponding to surviving the year is =-169

value corresponding to not surviving the year is =80000-169=79831

b)

expected value=0.9991*(-169)+0.0009*79831=-97

c)

Yes ; because the insuarance,,,,,,,,,profit of $97 on every,,,,,,,,,

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