document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=996544>Question 996544</A>: <I><SPAN STYLE=\"word-break: break-all;\"> An insurance company is going to sell 1 year life insurance policies with a face value of $40,000 to 25 year old men for $5000. Their mortality tables show that such men will live for 1 year with probability 0.90. Find the company's expected earnings per policy.  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #614941 by </B><A HREF=/tutors/aboutme.mpl?userid=Boreal><B>Boreal(15235)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Boreal><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/cgi-bin/show-face.mpl?user=Boreal><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=614941\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Expected value<BR>\n" );
document.write( "+: 5000(0.90)=4500<BR>\n" );
document.write( "-: 40000(0.10)=4000<BR>\n" );
document.write( "The expected value is $500 per policy.  Expected values are often never achievable (They can't ever get a return ending in $500), but are simply comparing the probabilities.  This is a favorable outcome for the insurance company given the data here. </SPAN>\n" );
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