The company can expect to pay out $ (Type an integer or a decimal.) over the year after the policies were written.
The company can expect to pay out $ (Type an integer or a decimal.) over the year after the policies were written.
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
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Transcribed Image Text:An insurance company has written 50 policies for $90,000, 100 policies for $30,000, and 250 policies for
$7500 for people of age 20. If experience shows that the probability that a person will die at age 20 is
0.0014, how much can the company expect to pay out during the year the policies were written?
The company can expect to pay out $ over the year after the policies were written.
(Type an integer or a decimal.)
Expert Solution
Step 1
here given ,
An insurance company has written 50 policies for $90,000, 100 policies for $30,000, and 250 policies for $7500 for people of age 20. If experience shows that the probability that a person will die at age 20 is 0.0014.
for random variable X
Expected Value of X = E(X) = X *p(X)
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