document.write( "Question 730575: There is a 0.9986 probability that a randomly selected 30 year old male lives through the year. A life insurance company charges $161 for insuring that the male lives through the year. If the male does not survive the year, the policy pays out $100,000 as a death benefit.
\n" ); document.write( "a. From the perspective of the insurance company what are the values corresponding to the two events of surviving the year and not surviving?
\n" ); document.write( "b. What is the expected value for the insurance company? \n" ); document.write( "

Algebra.Com's Answer #446761 by stanbon(75887) $\"\"$ $\"About$

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There is a 0.9986 probability that a randomly selected 30 year old male lives through the year. A life insurance company charges $161 for insuring that the male lives through the year. If the male does not survive the year, the policy pays out $100,000 as a death benefit.
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\n" ); document.write( "a. From the perspective of the insurance company what are the values corresponding to the two events of surviving the year and not surviving?
\n" ); document.write( "Random Number values: 161 and (-100,000+161)
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\n" ); document.write( "b. What is the expected value for the insurance company?
\n" ); document.write( "E(x) = 0.9986*161 + 0.0014*(-99839) = $21.00
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\n" ); document.write( "cheers,
\n" ); document.write( "Stan H.
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