Question

There is a 0.9989 probability that a randomly selected 29-year-old male lives through the year. A life insurance company charges $197 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $100,000 as a death benefit. Complete parts (a) through (c) below. a. From the perspective of the 29-year-old male, what are the monetary values corresponding to the two events of surviving the year and not surviving? The value corresponding to surviving the year is S The value corresponding to not surviving the year is S Type integers or decimals. Do not round.) . If the 29-year-old male purchases the policy, what is his expected value? The expected value is $ 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.)

Answer 1

Solurtion the year $197 aj Suniving Huot foly No Scaviving the yeaon 99803 LOCO b) 09989C-197) + C1-0.9989) 100 pUD - 196.7833+ 10 -86.7833 (3 -86 7833 A the Expecled valne s negafive foem the male's poupectve s poktive -foom the nsuonce Company per pectfheSo as the No. people porcharing thi C) 9nAuan ce be comes large,the Com panys pod9 Nalue d86.7833 por male to Connvege 80 the ave PA Gindoed padsting