SOLUTION: A life insurance company sells a 150,000 one year term life insurance policy to a 35 year old male for 300$. The probability that a 35 year old male survives the year is 0.998725.
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Question 917017: A life insurance company sells a 150,000 one year term life insurance policy to a 35 year old male for 300$. The probability that a 35 year old male survives the year is 0.998725. Compute and interpret the expected value for the insurance company
Answer by ewatrrr(24785) (Show Source): You can put this solution on YOUR website!
exp-value = 300(.998725) - 149,700(.001275) = 299.62 - 190.87 = $108.75
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