Question

Suppose a life insurance company sells a $200,000 1-year term life insurance policy to a 20-year-old female for $220. According to the National Vital Statistics Report, 58(21), the probability that the female survives the year is 0.999644. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ (Round to the nearest cent as needed.) Which of the following interpretations of the expected value is correct? Select the correct choice below and fill in the answer box to complete your choice. (Round to the nearest cent as needed.) A. The insurance company expects to make a maximum profit of $ B. The insurance company expects to make a minimum profit of $ on every 20-year-old female it insures for 1 year. on every 20-year-old female it insures for 1 month. C. The insurance company expects to make a profit of $ on every 20-year-old female it insures for 1 year. D. The insurance company expects to make a profit of $ on every 20-year-old female it insures for 1 month.

          Suppose a life insurance company sells a $200,000 1-year term life insurance policy to a 20-year-old female for $220. According to the National Vital Statistics Report, 58(21), the probability that the female survives the year is 0.999644.
Compute and interpret the expected value of this policy to the insurance company.
The expected value is $
(Round to the nearest cent as needed.)
Which of the following interpretations of the expected value is correct? Select the correct choice below and fill in the answer box to complete your choice.
(Round to the nearest cent as needed.)
A. The insurance company expects to make a maximum profit of $
B. The insurance company expects to make a minimum profit of $
on every 20-year-old female it insures for 1 year.
on every 20-year-old female it insures for 1 month.
C. The insurance company expects to make a profit of $
on every 20-year-old female it insures for 1 year.
D. The insurance company expects to make a profit of $
on every 20-year-old female it insures for 1 month.

Suppose a life insurance company sells a 200,000 1-year term life insurance policy to a 20-year-old female for220. According to the National Vital Statistics Report, 58(21), the probability that the female survives the year is 0.999644.
Compute and interpret the expected value of this policy to the insurance company.
The expected value is (Round to the nearest cent as needed.)
Which of the following interpretations of the expected value is correct? Select the correct choice below and fill in the answer box to complete your choice.
(Round to the nearest cent as needed.)
A. The insurance company expects to make a maximum profit of
B. The insurance company expects to make a minimum profit of on every 20-year-old female it insures for 1 year.
on every 20-year-old female it insures for 1 month.
C. The insurance company expects to make a profit of
on every 20-year-old female it insures for 1 year.
D. The insurance company expects to make a profit of on every 20-year-old female it insures for 1 month.

Added by Anita M.

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