Question

(1 point) Sam is applying for a single year life insurance policy worth $69,800.00. If the actuarial tables determine that she will survive the next year with probability 0.99, what is her expected value for the life insurance policy if the premium is $393.00

Answer 1

Answer:

The expected value might go down by $308.

Explanation:

Find the expected value of life insurance if the premium is $393.00

Do (393) * (0.99) - (69800) * (0.01)

The answer will be:

(393) * (0.99) - (69800) * (0.01) = -308