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

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Illustration 72. A certain nurshing home usually admits 50 patients per day. On the average, 3 patients in 100 require special rooms. On the morning of a certain day it is found that three such rooms are vacant. Assuming that 50 patients will be admitted, find the probability that more than 3 patients will require such special rooms.
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…
Engr. Sasuke of Hokage Design and Build Company has two bidding appointments on a given day. At the first appointment, he believes that he has a 80% chance to make the deal, from which he can earn 10,000 pesos commission if successful. On the other hand, he thinks he only has a 45% chance to make the deal at the second appointment, from which, if successful, he can make 15,000. What is his expected commission based on his own probability belief? Assume that the appointment results are independent of each other. a) 20,750 b) 17,750 c) 15,750 d) 14,750
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?
Is this right?
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
Illustration 32. The publishing company's estimate of profits and losses and their respective probabilities on the publication of this book during the first yer are as follows : Profit/Loss Probability Condition 500000 .20 If successful If moderate 200000 .30 If unsuccessful -100000 .50 Find the expected value of the profit of the company for this book during the first year.
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

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