SOLUTION: A 28-year-old man pays $125 for a one-year life insurance policy with coverage of $140,000. If the probability that he will live through the year is 0.9994, to the nearest dollar,
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Question 1036504: A 28-year-old man pays $125 for a one-year life insurance policy with coverage of $140,000. If the probability that he will live through the year is 0.9994, to the nearest dollar, what is the man’s expected value for the insurance policy?
A. $139,916
B. −$41
C. $84
D. −$124
Answer by robertb(5830) (Show Source): You can put this solution on YOUR website!
B. −$41.
The man’s expected value for the insurance policy = = -$41.
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