Suppose a life insurance company sells a $270,000 one-year term life insurance policy to a 19-year-old female for $260. The probability that the female survives the year is 0.999537. Compute and interpret the expected value of this policy to the insurance company.

Suppose a life insurance company sells a $270,000 one-year term life insurance policy to a 19-year-old female for $260. The probability that the female survives the year is 0.999537. Compute and interpret the expected value of this policy to the insurance company.

College Algebra

10th Edition

ISBN:9781337282291

Author:Ron Larson

Publisher:Ron Larson

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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Question

Suppose a life insurance company sells a $270,000 one-year term life insurance policy to a 19-year-old female for $260. The probability that the female survives the
year is 0.999537. Compute and interpret the expected value of this policy to the insurance company.
The expected value is $
(Round to two decimal places as needed.)

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Suppose a life insurance company sells a $270,000 one-year term life insurance policy to a 19​-year-old female for ​$260. The probability that the female survives the year is 0.999537. Compute and interpret the expected value of this policy to the insurance company.

Suppose a life insurance company sells a $270,000 one-year term life insurance policy to a 19-year-old female for $260. The probability that the female survives the year is 0.999537. Compute and interpret the expected value of this policy to the insurance company.