contestada

a 40-year-old man in the u.s. has a 0.247% risk of dying during the next year. an insurance company charges $280 per year for a life-insurance policy that pays a $100,000 death benefit. what is the expected value for the person buying the insurance? round your answer to the nearest cent. be careful with negative signs.

Respuesta :

The expected value is the sum of the gain or loss if an event occurs and the probability of that event. People who are afraid of risk will pay to avoid it. The foundation of insurance is this.

How is expected value calculated?

Simply multiply each value of the discrete random variable X by its probability and add the products to get the expected value, E(X), or mean. The formula is as follows: E (X) = = x P (x)

(0.00242)(99725)+(0.99758)(-275) = -$33 is the expected value.

What is expected value to the customer?

A customer's expectation of the quality of a company's products or services is measured by customer expectations.

Learn more about expected value here:

https://brainly.com/question/14723169

#SPJ4

Otras preguntas