Suppose a life insurance company sells a $160,000 one-year term life insurance policy to a 23-year-old female for $250. The probability that the female survives theyear is 0.999565. Compute and interpret the expected value of this policy to the insurance company.11The expected value is $(Round to two decimal places as needed.)11Which of the following interpretation of the expected value is correct?A. The insurance company expects to make an average profit of $16.40 on every 23-year-old female it insures for 1 month.B. The insurance company expects to make an average profit of $180.40 on every 23-year-old female it insures for 1 year.O C. The insurance company expects to make an average profit of $249.89 on every 23-year-old female it insures for 1 year.O D. The insurance company expects to make an average profit of $22.72 on every 23-year-old female it insures for 1 month.O O C

Answered: Suppose a life insurance company sells…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Let X = {Email, In Person, Instant Message, Text Message}; P(Email) = 0.06 P(In Person) = 0.55 P(Instant Message) = 0.24 P(Text Message) = 0.15 Is this model a probability distribution? A. Yes. B. No. C. Maybe.
Suppose that you are offered the following "deal." You roll a six sided die. If you roll a 6, you win $7. If you roll a 4 or 5, you win $2. Otherwise, you pay $8.a. Complete the PDF Table. List the X values, where X is the profit, from smallest to largest. Round to 4 decimal places where appropriate. Probability Distribution Table X P(X) b. Find the expected profit. $ (Round to the nearest cent)c. Interpret the expected value. If you play many games you will likely lose on average very close to $2.17 per game. You will win this much if you play a game. This is the most likely amount of money you will win. d. Based on the expected value, should you play this game? No, since the expected value is negative, you would be very likely to come home with less money if you played many games. Yes, since the expected value is positive, you would be very likely to come home with more money if you played many games. Yes, since the expected value is 0, you would be…
Suppose a life insurance company sells a $150,000 1-year term life insurance policy to a 20-year-old female for $300. According to the National Vital Statistics Report, 58(21), the probability that the female survives the year is 0.999544. Compute and interpret the expected value of this policy to the insurance company. .... The expected value is $ (Round to the nearest cent as needed.) Which of the following interpretations of the expected value is correct? Select the correct choice below and fill in the answer box to complete your choice. (Round to the nearest cent as needed.) O A. The insurance company expects to make a profit of $ on every 20-year-old female it insures for 1 month. B. The insurance company expects to make a profit of $ on every 20-year-old female it insures for 1 year. C. The insurance company expects to make a maximum profit of $ every year-old female it insures for 1 year. D. The insurance company expects to make a minimum profit of $ on every 20-year-old female…
K Suppose a life insurance company sells a $220,000 1-year term life insurance policy to a 20-year-old female for $230. According to the National Vital Statistics Report, 58(21), the probability that the female survives the year is 0.999544. Compute and interpret the expected value of this policy to the insurance company. The expected value is $. (Round to the nearest cent as needed.) Which of the following interpretations of the expected value is correct? Select the correct choice below and fill in the answer box to complete your choice. (Round to the nearest cent as needed.) OA. The insurance company expects to make a profit of $ on every 20-year-old female it insures for 1 month. OB. The insurance company expects to make a minimum profit of $ on every 20-year-old female OC. The insurance company expects to make a profit of $ on every 20-year-old female it insures for 1 year. OD. The insurance company expects to make a maximum profit of $ on every 20-year-old female it insures for 1…
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The probability is p = 0.80 that a patient with a certain disease will be successfully treated with a new medical treatment. Suppose that the treatment is used on 40 patients. The "expected value" of the number of patients who are successfully treated IS a. 8 b. 20 C. 32
Suppose a life insurance company sells a $160,000 1-year term life insurance policy to a 20-year-old female for $330. According to the National Vital Statistics Report, 58(21), the probability that th female survives the year is 0.999544. Compute and interpret the expected value of this policy to the insurance company. The expected value is $. (Round to the nearest cent as needed.). Which of the following interpretations of the expected value is correct? Select the correct choice below and fill in the answer box to complete your choice. (Round to the nearest cent as needed.) OA. The insurance company expects to make a profit of $ OB. The insurance company expects to make a maximum profit of $ OC. The insurance company expects to make a minimum profit of $ OD. The insurance company expects to make a profit of $ ! 1 Q @ 2 W 3 E $ 4 R on every 20-year-old female it insures for 1 year. on every 20-year-old female it insures for 1 year. on every 20-year-old female it insures for 1 month. on…
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Suppose that you are offered the following "deal." You roll a six sided die. If you roll a 6, you win $17. If you roll a 2, 3, 4 or 5, you win $4. Otherwise, you pay $6. a. Complete the PDF Table. List the X values, where X is the profit, from smallest to largest. Round to 4 decimal places where appropriate. Probability Distribution Table P(X) b. Find the expected profit. $ (Round to the nearest cent) c. Interpret the expected value. O This is the most likely amount of money you will win. Oif you play many games you will likely win on average very close to $4.50 per game. O You will win this much if you play a game. d. Based on the expected value, should you play this game? O No, since the expected value is negative, you would be very likely to come home with less money if you played many games. O Yes, since the expected value is positive, you would be very likely to come home with more money if you played many games. O No, this is a gambling game and it is always a bad idea to gamble.…

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