a. From the perspective of the 50-year-old female, what are the values corresponding to the two events if surviving the year and not surviving. b. Ifa 50-year-old female purchase the policy, what is her expected value? c. Can the insurance company expect to make a profit from many such policies? Why?

a. From the perspective of the 50-year-old female, what are the values corresponding to the two events if surviving the year and not surviving. b. Ifa 50-year-old female purchase the policy, what is her expected value? c. Can the insurance company expect to make a profit from many such policies? Why?

Name: Problem 8There is a 0.9968 probability that a randomly selected 50-ye
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Description: Problem 8There is a 0.9968 probability that a randomly selected 50-year-old female lives throughthe year (based on data from the U.S. Department of Health and Human Services). AFidelity life insurance company charges $226 for insuring that the femal

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Concept explainers

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.

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Question

Problem 8
There is a 0.9968 probability that a randomly selected 50-year-old female lives through
the year (based on data from the U.S. Department of Health and Human Services). A
Fidelity life insurance company charges $226 for insuring that the female will live
through the year. If she does not survive the year, the policy pays out $50,000 as a death
benefit.
a. From the perspective of the 50-year-old female, what are the values
corresponding to the two events if surviving the year and not surviving.
b. If a 50-year-old female purchase the policy, what is her expected value?
c. Can the insurance company expect to make a profit from many such policies?
Why?
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