Suppose a life insurance company sells a $170,000 one-year term life insurance policy to a 23-year-old female for $200. The probability that the female survives the year is 0.999567. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ (Round to two decimal places as needed.)
Suppose a life insurance company sells a $170,000 one-year term life insurance policy to a 23-year-old female for $200. The probability that the female survives the year is 0.999567. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ (Round to two decimal places as needed.)
Chapter8: Sequences, Series,and Probability
Section8.7: Probability
Problem 4ECP: Show that the probability of drawing a club at random from a standard deck of 52 playing cards is...
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Transcribed Image Text:Suppose a life insurance company sells a $170,000 one-year term life insurance policy to a 23-year-old female for $200. The probability that the female survives the
year is 0.999567. Compute and interpret the expected value of this policy to the insurance company.
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The expected value is $
(Round to two decimal places as needed.)
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