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.)
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.)
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
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Problem 1P
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![**Probability and Life Insurance Scenario**
In this scenario, there is a 0.9986 probability that a randomly selected 32-year-old male will live through the year. A life insurance company offers a policy that requires an annual premium of $189 for the assurance that this individual will live through the year. Should the insured individual not survive the year, a death benefit of $100,000 is paid out by the policy.
To evaluate this insurance policy from the perspective of the 32-year-old male, consider the monetary values associated with the two possible outcomes:
- **Surviving the Year:** The cost is the premium paid, which is **$189**.
- **Not Surviving the Year:** The benefit received is the death benefit minus the premium paid, resulting in a value of **$100,000**.
These calculations, assuming no rounding, can provide insights into the risk and benefits associated with this life insurance policy.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3c582252-6541-4096-9706-b4f3b52fcf1c%2Fd5f5e5b7-02f3-4b66-a9a7-27d018f07ae1%2Fsppk1ap_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Probability and Life Insurance Scenario**
In this scenario, there is a 0.9986 probability that a randomly selected 32-year-old male will live through the year. A life insurance company offers a policy that requires an annual premium of $189 for the assurance that this individual will live through the year. Should the insured individual not survive the year, a death benefit of $100,000 is paid out by the policy.
To evaluate this insurance policy from the perspective of the 32-year-old male, consider the monetary values associated with the two possible outcomes:
- **Surviving the Year:** The cost is the premium paid, which is **$189**.
- **Not Surviving the Year:** The benefit received is the death benefit minus the premium paid, resulting in a value of **$100,000**.
These calculations, assuming no rounding, can provide insights into the risk and benefits associated with this life insurance policy.
Expert Solution
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Step 1
Given:
The probability that randomly selected male lives through the year is = 0.9986
If the male will live through the year, A life insurance company charges = $189
If the male does not live through the year, A life insurance company pays = $100,000
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