Based on historical data, an insurance company estimates that a particular customer has a 1.2% likelihood of having an accident in the next year, with the average insurance payout being $3500. If the company charges this customer an annual premium of $120, what is the company's expected value of this insurance policy? tA

Based on historical data, an insurance company estimates that a particular customer has a 1.2% likelihood of having an accident in the next year, with the average insurance payout being $3500. If the company charges this customer an annual premium of $120, what is the company's expected value of this insurance policy? tA

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

See similar textbooks

Similar questions

You have inherited a lottery ticket which might be a $10,000 winner. You have a 0.25 chance of winning the $10,000 and a 0.75 chance of winning $0. You have an opportunity to sell the lottery ticket for $2,500 - What is your expected return and what should you do if are risk averse?
An insurance company has written 50 policies for $125,000, 100 policies for $30,000, and 250 policies for $10,000 for people of age 20. If experience shows that the probability that a person will die at age 20 is 0.0012, how much can the company expect to pay out during the year the policies were written?
Based on historical data, an insurance company estimates that a particular customer has a 1.4% likelihood of having an accident in the next year, with the average insurance payout being $1500. If the company charges this customer an annual premium of $50, what is the company's expected value of this insurance policy?
If the famous insurance company, Lloyd’s of London, insures a $3 million Monet painting for $5000 per year. And, in each year, the painting has a .00021 chance of being stolen according to the Lloyd’s research team? From Lloyd’s perspective, find the expectation for insuring this painting for one year
A company estimates that 0.6% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $250. If they offer a 2 year extended warranty for $39, what is the company's expected value of each warranty sold?
Suppose you pay $10 to roll a fair die with the understanding that you will get back $17 for rolling a 1 or a 2, nothing otherwise. What is your expected value? Round to the nearest cent. In your response do not use any words or symbols (i.e. $).
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 $295, what is the company's expectation? (Round your answer to the nearest dollar.)$
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).
A company estimates that 0.1% of their product will fail after th original warranty period but within 2 years of the purchase, with a replacement cost of $350. If they offer a 2 year warranty for $18 , what is the company's expected value of each warranty sold?