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Name: There is a 0.9987 probability that a randomly selected 29-year-old mal
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Description: There is a 0.9987 probability that a randomly selected 29-year-old male lives through the year. A life insurance company charges $190 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $1

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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There is a 0.9987 probability that a randomly selected 29-year-old male lives through the year. A life insurance company charges $190 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)-(c). 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? Value corresponding to surviving the year: $_ Value corresponding to not surviving the year: $_ b. If the 29-year-old male purchases the policy, what is his expected value? $_ c. Can the insurance company expect to make a profit from many such policies?

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