document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=444169>Question 444169</A>: <I><SPAN STYLE=\"word-break: break-all;\"> There is a 0.9968 probability that a randomly selected 50-year-old female lives through the year (based on data from the U.S. Department of Health and Human Services). A Fidelity life insurance company charges $226 for insuring that the female will live through the year. If she does not survive the year, the policy pays out $50,000 as a death benefit.\r<BR>\n" );
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document.write( "From the perspective of the 50-year-old female, what are the values corresponding to the two events of surviving the year and not surviving?<BR>\n" );
document.write( "If a 50-year-old female purchases the policy, what is her expected value?\r<BR>\n" );
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document.write( "In the event she lives, the value is -$226.  In the event she dies, the value is $49,774.\r<BR>\n" );
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document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #306282 by </B><A HREF=/tutors/aboutme.mpl?userid=stanbon><B>stanbon(75887)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=stanbon><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=306282\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> There is a 0.9968 probability that a randomly selected 50-year-old female lives through the year (based on data from the U.S. Department of Health and Human Services).<BR>\n" );
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document.write( "A Fidelity life insurance company charges $226 for insuring that the female will live through the year. If she does not survive the year, the policy pays out $50,000 as a death benefit. <BR>\n" );
document.write( "From the perspective of the 50-year-old female, what are the values corresponding to the two events of surviving the year and not surviving?<BR>\n" );
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document.write( "Ans: -226 ; 50,000-226 = 49774<BR>\n" );
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document.write( "If a 50-year-old female purchases the policy, what is her expected value? <BR>\n" );
document.write( "WORK TRIED:<BR>\n" );
document.write( "In the event she lives, the value is -$226. In the event she dies, the value is $49,774. <BR>\n" );
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document.write( "E(x) = 0.9968*(-226) + 0.0032(49774) = -$66<BR>\n" );
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document.write( "Cheers,<BR>\n" );
document.write( "Stan H.<BR>\n" );
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