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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

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

MATLAB: An Introduction with Applications
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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Suppose a life insurance company sells a $280,000 one-year term life insurance policy to a 20-year-old female for $300. The probability that the female survives the year is 0.999585. 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 $16.71 on every 20-year-old female it insures for 1 month. OB. The insurance company expects to make an average profit of $27.26 on every 20-year-old female it insures for 1 month. OC. The insurance company expects to make an average profit of $299.88 on every 20-year-old female it insures for 1 year. D. The insurance company expects to make an average profit of $183.80 on every 20-year-old female it insures for 1 year.
Transcribed Image Text:Suppose a life insurance company sells a $280,000 one-year term life insurance policy to a 20-year-old female for $300. The probability that the female survives the year is 0.999585. 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 $16.71 on every 20-year-old female it insures for 1 month. OB. The insurance company expects to make an average profit of $27.26 on every 20-year-old female it insures for 1 month. OC. The insurance company expects to make an average profit of $299.88 on every 20-year-old female it insures for 1 year. D. The insurance company expects to make an average profit of $183.80 on every 20-year-old female it insures for 1 year.
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