SOLUTION: a 50 year old women in the US has a 0.0025 chance of dying in the next year. she purchases a $250,000 life insurance policy for $350. what is her expected value of this insurance?

Algebra ->  Probability-and-statistics -> SOLUTION: a 50 year old women in the US has a 0.0025 chance of dying in the next year. she purchases a $250,000 life insurance policy for $350. what is her expected value of this insurance?      Log On


   

Question 1162647: a 50 year old women in the US has a 0.0025 chance of dying in the next year. she purchases a $250,000 life insurance policy for $350. what is her expected value of this insurance?
Answer by ikleyn(52879) About Me  (Show Source):
You can put this solution on YOUR website!
.

The expected value is  0.0025%2A250000+-+350 = 275 dollars.

Pretty much (!)

To die and to earn (!)