SOLUTION: Mortality tables enable actuaries to obtain the probability that a person at any particular age will live a specified number of years. Insurance companies and others use such prob

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Question 1162528: Mortality tables enable actuaries to obtain the probability that a person at any particular age will
live a specified number of years. Insurance companies and others use such probabilities to determine
life-insurance premiums, retirement pensions, and annuity payments. According to tables provided
by the National Center for Health Statistics in Vital Statistics of the United Republic of Tanzania, a
person of age 20 years has about an 80% chance of being alive at age 65 years. Suppose three people
of age 20 years are selected at random.
(a) Formulate the process of observing which people are alive at age 65 as a sequence of three trials
(b) Obtain the possible outcomes of the 3 trials
(c) Determine the probability of each outcome in part (b).
(d) Find the probability that exactly two of the three people will be alive at age 65.
(e) Obtain the probability distribution of the number of people of the 3 who are alive at age 65.
(f) Draw the probability histograms for probability distribution in (e) above and state the type o
Answer by Boreal(15235) (Show Source):
You can put this solution on YOUR website!
LLL probability 0.8^3
LLD probability 0.8^2*0.2
LDLsame as last
LDD 0.8*0.2*0.2
DLL 0.2*0.8*0.8
DLD 0.2*0.8*0.2
DDL 0.2*0.2*0.8
DDD 0.2^3
exactly two of the three is 3*0.8*0.8*0.2=0.384
exactly one of the three is 3*0.8*0.2*0.2=0.096
all three is 0.512
none is 0.008
They add up to 1.
This is enough to answer the question.