KSuppose a life insurance company sells a $260,000 one-year term life insurance policy to a 19-year-old female for$370. The probability that the female survives the year is 0.999637. Compute and interpret the expected value of thispolicy to the insurance company.isThe expected value is $(Round to two decimal places as needed.)View an example Get more help -< PreviousQ SearchhpClett allNext >13

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Answered: Suppose a life insurance company sells…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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The probability that a 29-year old female will die within 1-year is 0.000594. If an insurance company sells a 1-year, $50000 life insurance policy to a 29-year old female for $77, what is the expected value for the insurance company? Round your answer to the nearest cent.
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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…
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.

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Suppose a life insurance company sells a $260,000 one-year term life insurance policy to a 19-year-old female for $370. The probability that the female survives the year is 0.999637. Compute and interpret the expected value of this policy to the insurance company.