Suppose a life insurance company sells a $270,000 1-year term life insurance policy to a 20-year-old female for $330. According to the National Vital Statistics Report, 58(21), the probability that the female survives the year is 0.999544. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ (Round to the nearest cent as needed.)
Suppose a life insurance company sells a $270,000 1-year term life insurance policy to a 20-year-old female for $330. According to the National Vital Statistics Report, 58(21), the probability that the female survives the year is 0.999544. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ (Round to the nearest cent as needed.)
Chapter8: Sequences, Series,and Probability
Section: Chapter Questions
Problem 41CT: On a game show, a contestant is given the digits 3, 4, and 5 to arrange in the proper order to form...
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Transcribed Image Text:Suppose a life insurance company sells a $270,000 1-year term life insurance policy to a 20-year-old female for $330.
According to the National Vital Statistics Report, 58(21), the probability that the female survives the year is 0.999544.
Compute and interpret the expected value of this policy to the insurance company.
The expected value is $
(Round to the nearest cent as needed.)
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