Question Help Suppose a life insurance company sells a $250,000 one-year term life insurance policy to a 21-year-old female for $270. The probability that the female surviv year is 0.999507. Compute and interpret the expected value of this policy to the insurance company. The expected value is $. (Round to two decimal places as needed.) Which of the following interpretation of the expected value is correct? O A. The insurance company expects to make an average profit of $146.75 on every 21-year-old female it insures for 1 year. O B. The insurance company expects to make an average profit of $24.53 on every 21-year-old female it insures for 1 month. O C. The insurance company expects to make an average profit of $269.87 on every 21-year-old female it insures for 1 year. O D. The insurance company expects to make an average profit of $13.34 on every 21-year-old female it insures for 1 month. ent sigi signi d Ass Click to select your answer(s).

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
icon
Related questions
Topic Video
Question
Question Help ▼
Suppose a life insurance company sells a $250,000 one-year term life insurance policy to a 21-year-old female for $270. The probability that the female survives the
year is 0.999507. Compute and interpret the expected value of this policy to the insurance company.
The expected value is $.
(Round to two decimal places as needed.)
Which of the following interpretation of the expected value is correct?
O A. The insurance company expects to make an average profit of $146.75 on every 21-year-old female it insures for 1 year.
O B. The insurance company expects to make an average profit of $24.53 on every 21-year-old female it insures for 1 month.
O C. The insurance company expects to make an average profit of $269.87 on every 21-year-old female it insures for 1 year.
O D. The insurance company expects to make an average profit of $13.34 on every 21-year-old female it insures for 1 month.
ent
sigi
signi
d Ass Click to select your answer(s).
(Elementary Statistics Section OL1 Spring 2021 CO) is based on Sullivan: Fundamentals of Statistics, 5e
se Privacy Policy Copyright © 2021 Pearson Education Inc. All Rights Reserved.
Transcribed Image Text:Question Help ▼ Suppose a life insurance company sells a $250,000 one-year term life insurance policy to a 21-year-old female for $270. The probability that the female survives the year is 0.999507. Compute and interpret the expected value of this policy to the insurance company. The expected value is $. (Round to two decimal places as needed.) Which of the following interpretation of the expected value is correct? O A. The insurance company expects to make an average profit of $146.75 on every 21-year-old female it insures for 1 year. O B. The insurance company expects to make an average profit of $24.53 on every 21-year-old female it insures for 1 month. O C. The insurance company expects to make an average profit of $269.87 on every 21-year-old female it insures for 1 year. O D. The insurance company expects to make an average profit of $13.34 on every 21-year-old female it insures for 1 month. ent sigi signi d Ass Click to select your answer(s). (Elementary Statistics Section OL1 Spring 2021 CO) is based on Sullivan: Fundamentals of Statistics, 5e se Privacy Policy Copyright © 2021 Pearson Education Inc. All Rights Reserved.
Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Discrete Probability Distributions
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman