If BIC charge
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A: Solution-: A magazine subscription service is having a contest in which the prize is $40,000. If the…
Q: Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest…
A: It is needed to find the expected value of this insurance policy to the company.
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Q: Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest…
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A: Given that: The percentage of product fail = 0.1 % = 0.001 Replacement cost = $ 200 Now, here…
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A: On a good day, Jim averages a $1400 gain. On a bad day, Jim averages a $700 loss.Percentage of time…
Q: Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest…
A: Given Data: Probability of surviving=0.865 Probability of death=1-0.865=0.135 Premium=7905 Death…
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Q: Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest…
A: Final answer is: 5446 silver coins
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A: From the provided information,The probability distribution table can be constructed…
Q: Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest…
A: Given: BIC charges a premium = 6591 silver coins. BIC pay a death benefit = 47460 The probability of…
Q: Sam is applying for a single year life insurance policy worth $71,300.00. If the actuarial tables…
A: x P(x) xP(x) -358 0.99 -354.42 70942 0.01 709.42
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A: Part 1: To calculate the expected payoff of the bond in three years, we need to consider the…
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Q: Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest…
A: From the given information, the probability of surviving such a quest is 94.0% and the probability…
Q: Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest…
A: Formula : Expected value = ∑xP(x)
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Q: Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest…
A: Use the given information to obtain the expected value of this insurance policy to BIC.
Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest to Moria. Based on past experience, the probability of surviving such a quest is 98.9%. If BIC charges a premium of 5,846 silver coins and would pay a death benefit of 98,500 silver coins if the insured were to die, what is the
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- A $150 eReader comes with a warranty from an electronics business that covers theft (T) and accidental damage (AD) . Due to the high expense of repairing an eReader, it is more cost-effective for the business to provide the customer a complete refund to go toward another one. There is a 5.1% possibility that an AD (Accidenal Claim) claim will be made in any given year. Assume there can only be one claim made (not one of each type).Customers who report an eReader as stolen will get a reimbursement for 80% of the item's full price. A Theft (T) claim is likely to be submitted 3.5% of the time in any given year.What is the anticipated financial benefit or loss for the firm on each contract if the warrantee costs $15.95 for a year?(NOTE: Keep in mind that regardless of whether a claim is made, the consumer will pay for the warranty upfront.)If a player rolls 2 dice and gets a sum of 3 or 11, he wins $10. If he gets a sum of 7, he pays $5. What is his expected value?A customer has approached a bank for a $100,000 one-year loan at an 8% interest rate. If the bank does not approve this loan application, the $100,000 will be invested in bonds that earn a 6% annual return. Withoutadditional information, the bank believes that there is a 4% chance that this customer will default on the loan, assuming that the loan is approved. If the customer defaults on the loan, the bank will lose $100,000. At a cost of $1000, the bank can thoroughly investigate the customer’s credit record and supply a favorable or unfavorable recommendation. Past experience indicates that the probability of a favorable recommendation for a customer who will eventually not default is 0.80, and the chance of a favorable recommendation for a customer who will eventually default is 0.15.a. Use a decision tree to find the strategy the bank should follow to maximize its expected profit.b. Calculate and interpret the expected value of information (EVI) for this decision problem.c.…
- Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest to Moria. Based on past experience, the probability of surviving such a quest is 80.6%. If BIC charges a premium of 8,499 silver coins and would pay a death benefit of 52,297 silver coins if the insured were to die, what is the expected value of this insurance policy to BIC?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 yearA 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 $400. If they offer a 2 year extended warranty for $42, what is the company's expected value of each warranty sold?
- There is a 0.9985 probability that a randomly selected 33 year old male lives through the year. A life insurance company charges $155 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $100,000 as a death benefit. From the perspective of the 33 year old male, what are the monetary values corresponding to the two events of surviving the year and not surviving?Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest to Moria. Based on past experience, the probability of surviving such a quest is 88.9%. If BIC charges a premium of 8,240 silver coins and would pay a death benefit of 56,881 silver coins if the insured were 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 to BIC, enter your answer as a negative number. Phil Dunphy, a real estate agent, is considering whether he should list an unusual $303,402 house for sale. If he lists it, he will need to spend $3,848 in advertising, staging, and fresh cookies. The current owner has given Phil 6 months to sell the house. If he sells it, he will receive a commission of $23,557. If he is unable to sell the house, he will lose the listing and his expenses. Phil estimates the probability of selling this house in 6 months to be 73%. What is the expected…Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest to Moria. Based on past experience, the probability of surviving such a quest is 92.2%. If BIC charges a premium of 7,941 silver coins and would pay a death benefit of 42,081 silver coins if the insured were 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 to BIC, enter your answer as a negative number.
- 2. If an insurance company issues a $200,000 five-year policy on a man whose probability of living for another five years is .994, what is the minimum that the expected cost to the company for this policy?Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest to Moria. Based on past experience, the probability of surviving such a quest is 95.5%. If BIC charges a premium of 9,900 silver coins and would pay a death benefit of 49,518 silver coins if the insured were 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 to BIC, enter your answer as a negative number.
