It is estimated that there are 35 deaths for every 10 million people who use airplanes. A company that sells fight insurance provides $100,000 in case of death in a plane crash. A policy can be purchased for $1. Calculate the expected value and thereby determine how much the insurance company can make over the long run for each policy that it sells. The expected value is $ (Round to the nearest cent)
It is estimated that there are 35 deaths for every 10 million people who use airplanes. A company that sells fight insurance provides $100,000 in case of death in a plane crash. A policy can be purchased for $1. Calculate the expected value and thereby determine how much the insurance company can make over the long run for each policy that it sells. The expected value is $ (Round to the nearest cent)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:It is estimated that there are 35 deaths for every 10 million people who use airplanes. A company that sells flight insurance provides $100,000 in
case of death in a plane crash. A policy can be purchased for $1. Calculate the expected value and thereby determine how much the insurance
company can make over the long run for each policy that it sells.
The expected value is $
(Round to the nearest cent.)
ITS
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