Suppose a life insurance company sells a $180,000 1-year term life insurance policy to a 20-year-old female for $370.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 theanswer box to complete your choice.(Round to the nearest cent as needed.)The insurance company expects to make a maximum profit of $ on every 20-year-old female it insures for 1O A.year.B. The insurance company expects to make a profit of $C. The insurance company expects to make a profit of $D.The insurance company expects to make a minimummonth.on every 20-year-old female it insures for 1 month.on every 20-year-old female it insures for 1 year.profit of $on every 20-year-old female it insures for 1

The probability that the female survives the year is 0.999544. The amount paid is $370.

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.
Amount of claim (to nearest $20,000) Probability $0 0.70 $20,000 0.17 $40,000 0.06 $60,000 0.04 $80,000 0.02 $100,000 0.01 A. Calculate the expected value? B. How much should the company charge as an average premium so that it breaks even on its claim costs? C. How much should the company charge to make a profit of $50 per policy?
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…
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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For question (a): 1) Write the probability statement 2) Draw and label a sketch of the distribution, indicating what it is that you are looking for, etc. 3) Show all work 4) Round to 4 decimal places, and circle your answer Then, answer question (b). Jim is the Director of quality Assurance for Oberweis. It is his job to make sure the machine that fills the pint bottles of milk for distribution in vending machines is working properly. The machine is regulated so that the amount of milk dispensed has a mean of 16 ounces and a standard deviation of 0.11 ounces. Jim selects 40 bottles of milk and carefully measures the contents. By his calculations, the sample mean of the bottles is 15.9 ounces, (a) What is the probability that a randomly selected sample of 40 milk bottles will contain an average of 15.9 ounces of milk or less? (b) What should Jim conclude about the machine? is it working properly?

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