There is a 0.9984 probability that a randomly selected 27​-year-old male lives through the year. A life insurance company charges ​$194 for insuring that the male will live through the year. If the male does not survive the​ year, the policy pays out ​$100,000 as a death benefit. Complete parts​ (a) through​ (c) below.       a. From the perspective of the 27​-year-old ​male, what are the monetary values corresponding to the two events of surviving the year and not​ surviving?   The value corresponding to surviving the year is ​$nothing. The value corresponding to not surviving the year is ​$nothing. ​(Type integers or decimals. Do not​ round.) b. If the 27​-year-old male purchases the​ policy, what is his expected​ value?   The expected value is ​$nothing. ​(Round to the nearest cent as​ needed.) c. Can the insurance company expect to make a profit from many such​ policies? Why?   ▼   No, Yes, because the insurance company expects to make an average profit of ​$nothing on every 27-year-old male it insures for 1 year

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
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There is a
0.9984
probability that a randomly selected
27​-year-old
male lives through the year. A life insurance company charges
​$194
for insuring that the male will live through the year. If the male does not survive the​ year, the policy pays out
​$100,000
as a death benefit. Complete parts​ (a) through​ (c) below.
 
 
 
a. From the perspective of the
27​-year-old
​male, what are the monetary values corresponding to the two events of surviving the year and not​ surviving?
 
The value corresponding to surviving the year is
​$nothing.
The value corresponding to not surviving the year is
​$nothing.
​(Type integers or decimals. Do not​ round.)
b. If the
27​-year-old
male purchases the​ policy, what is his expected​ value?
 
The expected value is
​$nothing.
​(Round to the nearest cent as​ needed.)
c. Can the insurance company expect to make a profit from many such​ policies? Why?
 
 
No,
Yes,
because the insurance company expects to make an average profit of
​$nothing
on every
27-year-old
male it insures for 1 year.
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