There is a 0.9984 probability that a randomly selected 29-year-old male lives through the year. A life insurance company charges $162 for insuring that the male will live through the year. If the male does not survivethe year, the policy pays out $90,000 as a death benefit. Complete parts (a) through (c) below.a. From the perspective of the 29-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 $The value corresponding to not surviving the year is $(Type integers or decimals. Do not round.)b. If the 29-year-old male purchases the policy, what is his expected value?The expected value is $(Round to the nearest cent as needed.)c. Can the insurance company expect to make a profit from many such policies? Why?because the insurance company expects to make an average profit of $on every 29-year-old male it insures for 1 year.(Round to the nearest cent as needed.)MacBook吕0000000F7F6F5F3F4escF1F2&232$712345YP

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Answered: There is a 0.9984 probability that a…

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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In repeated games, players choose their actions... Select one: O a. always simultaneously O b. always sequentially. O c. simultaneously or sequentially.
A $150 eReader comes with a warranty from an electronics business that covers theft (T) and accidental damage (AD) . Due to the high expense of repairing an eReader, it is more cost-effective for the business to provide the customer a complete refund to go toward another one. There is a 5.1% possibility that an AD (Accidenal Claim) claim will be made in any given year. Assume there can only be one claim made (not one of each type).Customers who report an eReader as stolen will get a reimbursement for 80% of the item's full price. A Theft (T) claim is likely to be submitted 3.5% of the time in any given year.What is the anticipated financial benefit or loss for the firm on each contract if the warrantee costs $15.95 for a year?(NOTE: Keep in mind that regardless of whether a claim is made, the consumer will pay for the warranty upfront.)
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K There is a 0.9986 probability that a randomly selected 32-year-old male lives through the year. A life insurance company charges $189 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 32-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 $ The value corresponding to not surviving the year is $ (Type integers or decimals. Do not round.)
A customer has approached a bank for a $100,000 one-year loan at an 8% interest rate. If the bank does not approve this loan application, the $100,000 will be invested in bonds that earn a 6% annual return. Withoutadditional information, the bank believes that there is a 4% chance that this customer will default on the loan, assuming that the loan is approved. If the customer defaults on the loan, the bank will lose $100,000. At a cost of $1000, the bank can thoroughly investigate the customer’s credit record and supply a favorable or unfavorable recommendation. Past experience indicates that the probability of a favorable recommendation for a customer who will eventually not default is 0.80, and the chance of a favorable recommendation for a customer who will eventually default is 0.15.a. Use a decision tree to find the strategy the bank should follow to maximize its expected profit.b. Calculate and interpret the expected value of information (EVI) for this decision problem.c.…
Suppose that a life insurance company insures 1,000,000 fifty-year-old people in a given year. (Assume a death rate of 4 per 1000 people.) The cost of the premium is $100 per year, and the death benefit is $50,000. What is the expected profit or loss for the insurance company? The insurance company can expect a(n) $ million (Type an integer or decimal rounded to one decimal place as needed.)
If the famous insurance company, Lloyd’s of London, insures a $3 million Monet painting for $5000 per year. And, in each year, the painting has a .00021 chance of being stolen according to the Lloyd’s research team? From Lloyd’s perspective, find the expectation for insuring this painting for one year
Suppose best buy offers an extended warranty for $25 on an electronic device whose value is $250. Suppose best buy estimates the probability the item will be returned for a claim on that warranty is 5%. Assume that if an item is returned, best buy will refund the $250 purchase price. What is best buys expected value on the warranty?
There is a 0.9984 probability that a randomly selected 31-year-old male lives through the year. A life insurance company charges $159 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $80,000 as a death benefit. Complete parts (a) through (c) below. a. From the perspective of the 31-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 $ The value corresponding to not surviving the year is $ (Type integers or decimals. Do not round.)
Suppose 25% of workers in a market are willing to work for $55.000 and 75% of workers are willing to work for $63,000. The expected benetit of searching (interviewing) another worker equals S
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There is a 0.9986 probability that a randomly selected 27-year-old male lives through the year. A life insurance company charges $157 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $80,000 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? because the insurance company expects to make an average profit of $nothing on every 27-year-old male it…

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