Suppose that a life insurance company insures 900,000 fifty-year-old people in a given year. (Assume a death rate of 8 per 1000 people.) The cost of the premium is $500 per year, and the death benefit is $45,000. What is the expected profit or loss for the insurance company?
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
Suppose that a life insurance company insures
fifty-year-old people in a given year. (Assume a death rate of
per 1000 people.) The cost of the premium is
per year, and the death benefit is
What is the expected profit or loss for the insurance company?
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