Brandybuck Insurance Company (BIC) is deciding whether to insure the livesof those leading a quest to Moria. Based on past experience, the probabilityof surviving such a quest is 99.4%. If BIC charges a premium of 5,920 silvercoins and would pay a death benefit of 78,967 silver coins if the insuredwere to die, what is the expected value of this insurance policy to BIC?Round to the nearest silver coin as needed. If the expected value is a loss toBIC, enter your answer as a negative number.

Final answer is: 5446 silver coins

Answered: Brandybuck Insurance Company (BIC) is…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

See similar textbooks

Similar questions

Avicenna, a major insurance company, offers five-year life insurance policies to 65-year-olds. If the holder of one of these policies dies before the age of 70, the company must pay out $27,400 to the beneficiary of the policy. Executives at Avicenna are considering offering these policies for $765 each. Suppose that for each holder of a policy there is a 3% chance that they will die before the age of 70 and a 97% chance they will live to the age of 70. If the executives at Avicenna know that they will sell many of these policies, should they expect to make or lose money from offering them? How much? To answer, take into account the price of the policy and the expected value of the amount paid out to the beneficiary. Avicenna can expect to make money from offering these policies. In the long run, they should expect to make dollars on each policy sold. O Avicenna can expect to lose money from offering these policies. In the long run, they should expect to lose dollars on each policy…
Suppose the probability of an IRs audit is 4.2 percent for U.S taxpayers who file form 1040 and who earned 100,000 or more. what are the odds that such taxpayer will be audited? what are the odds against such taxpayer being audited?
14. Please answer the following question.
Suppose you are a broker (of junk bonds) who buys only bonds that have a 55% chance of not defaulting. You want to put together a portfolio of bonds with at least four that will not default. You want to be 93.9% sure that at least four will not default. How many bonds should you buy?
John and Larry are fundraisers for UNO. A wealthy benefactor says that he will match whatever John raises in the month of June – so if John raises 10,000 the benefactor will contribute an additional 10,000; if John raises 15,000, the benefactor will contribute an additional 15,000, etc. If John’s average monthly fundraising figure (expected value) is $25,000, and Larry’s is $30,000, what is the expected value for how much money UNO will raise in June?Explicitly state any properties of expectation you use to justify your conclusion.
solve the following
An investment counselor calls with a hot stock dp. He beleves that if the economy remains strong, the Investment will result in a profit of $60,000. It the economy grows at a moderate pace, the Investment will result in a proft of $20,000. However, if the economy goes into recession, the investment will result in a loss of $00,000. You contact an economist who beleves there is a 20% probability the economy will remain strong, a 70% probability the economy will grow at a moderate pace, and a 106 probabilty the economy will slip into recession. What is the expected proftt from this investment? The expected proft is s (Type an integer or a decimal) Enter your answer in the answer box and then click Check Answer. All parts showing Clear All Check Anr can
Mr. X owes a lot of money to the mafia. If he misses three weekly payments in a row, the mafia boss will lose her patience and Mr. X will be in big trouble (after which he will have larger problems than weekly payments). Let’s say that the probability that Mr.X misses a payment is 5%. Further, at any time, there is a probability of 2% that Mr. X manages to pull off a get-rich-quick scheme and pays off his debt. Model the system as a Markov chain so that you can then evaluate the probability to pay-offthe debt for Mr. X. Write down the transition matrix, identify matrices Q and R. Calculate the matrix N and find the probability that the debt is repaid. Find the expected time until payments are a non-issue one way or the other
A particular "homogeneous" travel accident insurance portfolio consists of 5,000 policies issued for a period of one year. The probability that a randomly chosen insured will require the reimbursement of her/his losses is 3%, and if a loss event has occurred, then the amount of the loss is a uniform r.v. § ranging from $0 to $5,000. Amounts of the payoffs for different policies are independent. Finish the following Questions: 1-8. Numerical answers below may be rounded. Advices: 1) It make sense to set $100 as a unit of money and recalculate the answer at the very end of calculations. (b-a) ² 12 2) Recollect that for a distribution uniform on [a,b], the mean is and the variance is a+b 2 2 3) When calculating, do it accurately (certainly you can use calculators); just in case, double check.
Suppose 58.8% of small businesses experience cash flow problems in their first 5 years. A consultant takes a random sample of 557 businesses that have been opened for 5 years or less. What is the probability that greater than 55.85% of the businesses have experienced cash flow problems? Question 2 options: 1) 0.9214 2) 0.5000 3) -6.0341 4) 0.0786 5) >0.999
MotoWin Auto Superstore is thinking about offering a two-year limited warranty for $915 on all new cars of a certain model. The terms of the warranty would be that MotoWin would replace the car free of charge under certain, specified conditions. Replacing the car in this way would cost MotoWin $15,700. Suppose that under the warranty, there is a 6% chance that MotoWin would have to replace the car one time and a 94% chance they wouldn't have to replace the car. (If necessary, consult a list of formulas.). If MotoWin knows that it will sell many of these warranties, should it expect to make or lose money from offering them? How much? To answer, take into account the price of the warranty and the expected value of the cost from replacing the car. MotoWin can expect to make money from offering these warranties. In the long run, they should expect to make dollars on each warranty sold. O MotoWin can expect to lose money from offering these warranties. In the long run, they should expect to…
Previous Problem Problem List Next Problem point Sam is applying for a single year life insurance policy worth $62,850.00. If the actuarial tables determine that she will survive the next year with probability 0.998, what is her expected value for the life insurance policy if the premium is $417.00? Give your answer to the nearest penny. (Note: Include dollar signs in your answer. If your answer is negative, answer as -$123.45)

SEE MORE QUESTIONS

Recommended textbooks for you

Advanced Engineering Mathematics

Advanced Math

ISBN:

9780470458365

Author:

Erwin Kreyszig

Publisher:

Wiley, John & Sons, Incorporated

Numerical Methods for Engineers

Advanced Math

ISBN:

9780073397924

Author:

Steven C. Chapra Dr., Raymond P. Canale

Publisher:

McGraw-Hill Education

Introductory Mathematics for Engineering Applicat…

Advanced Math

ISBN:

9781118141809

Author:

Nathan Klingbeil

Publisher:

WILEY

Advanced Engineering Mathematics

Advanced Math

ISBN:

9780470458365

Author:

Erwin Kreyszig

Publisher:

Wiley, John & Sons, Incorporated

Numerical Methods for Engineers

Advanced Math

ISBN:

9780073397924

Author:

Steven C. Chapra Dr., Raymond P. Canale

Publisher:

McGraw-Hill Education

Introductory Mathematics for Engineering Applicat…

Advanced Math

ISBN:

9781118141809

Author:

Nathan Klingbeil

Publisher:

WILEY

Mathematics For Machine Technology

Advanced Math

ISBN:

9781337798310

Author:

Peterson, John.

Publisher:

Cengage Learning,

Basic Technical Mathematics

Advanced Math

ISBN:

9780134437705

Author:

Washington

Publisher:

PEARSON

Topology

Advanced Math

ISBN:

9780134689517

Author:

Munkres, James R.

Publisher:

Pearson,

SEE MORE TEXTBOOKS