An insurance company sells a $10,000 one-yearterm life insurance policy to a customer at anannual premium of $290. According to their data,the probability of a person of this customer's age,sex, health, etc. dying in the next year is .001.What is the expected value for the company for apolicy of this type?The expected value isthe nearest hundredths).That means the insurance company canexpect to gain $(round to(round tothe nearest hundredths) on average, per year.Mathematically, would this be considered a"fair" deal between the insurance companyand the customer? No

Suppose a variable x defines the net amount get by the company from the policy.

Answered: An insurance company sells a $10,000…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

See similar textbooks

Similar questions

The probability that a 22-year-old female in the U.S. will die within one year is approximately 0.00044. If an insurance company sells a one-year, $20,000 life insurance policy to such a person for $295, what is the company's expectation? (Round your answer to the nearest dollar.)$
Ashley’s Internet service is terribly unreliable. In fact, on any given day, there is a 75% chance that her Internet connection will be lost at some point that day. What is the probability that her Internet service is not broken for five days in a row? Enter a fraction or round your answer to 4 decimal places, if necessary.
1000 raffle tickets were sold for $4 each. 2 prizes of $500 each, and 11 prizes of $100 each is to be awarded to winners. If Olga purchases one ticket, what is the expected value of her winnings? Round your answer to two decimal places (to the nearest cent).
Suppose a life insurance company sells a $230,000 one-year term life insurance policy to a 20-year-old female for$240. The probability that the female survives the year is 0.999463. Compute and interpret the expected value of this policy to the insurance company.
Ashley’s Internet service is terribly unreliable. In fact, on any given day, there is a 60% chance that her Internet connection will be lost at some point that day. What is the probability that her Internet service is not broken for seven days in a row? Enter a fraction or round your answer to 4 decimal places, if necessary.
An insurance company estimates the probability of an earthquake in the next year to be 0.0013. The average damage done by an earthquake is estimated to be $60,000. If the company offers earthquake insurance for $100, what is their expected value of the policy?
An insurance policy on an electrical device pays a benefit of $2400 if the device fails during the first year. The amount of the benefit decreases by $800 each successive year until it reaches 0 . If the device has not failed by the beginning of any given year, the probability of failure during that year is 0.29.Find the expected benefit under this policy.
Suppose a life insurance company sells a $280,000 one-year term life insurance policy to a 24-year-old female for $180. The probability that the female survives the year is 0.999522. Compute and interpret the expected value of this policy to the insurance company.
There is a 0.9985 probability that a randomly selected 30-year-old male lives through the year. A life insurance company charges $191 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $120,000 as a death benefit. Complete parts (a) through (c) below.
The probability that a 80-year-old female in the U.S. will die within one year is about 0.048711. An insurance company is preparing to sell a 80-year-old female a one-year, $20,000 life insurance policy. How much should it charge for its premium in order to have a positive expectation for the policy? (Round your answer to the nearest dollar.)$

Recommended textbooks for you

A First Course in Probability (10th Edition)

Probability

ISBN:

9780134753119

Author:

Sheldon Ross

Publisher:

PEARSON

A First Course in Probability

Probability

ISBN:

9780321794772

Author:

Sheldon Ross

Publisher:

PEARSON

A First Course in Probability (10th Edition)

Probability

ISBN:

9780134753119

Author:

Sheldon Ross

Publisher:

PEARSON

A First Course in Probability

Probability

ISBN:

9780321794772

Author:

Sheldon Ross

Publisher:

PEARSON

SEE MORE TEXTBOOKS