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Mathematics, 20.01.2021 19:50 Briza19

A life insurance company sells a term insurance policy to 21-year old males that pays $100,00 if the insured dies within the next 5 years. The probability that a randomly chosen male will die each year can be found in mortality tables. The company collects a premium, of $250 each year as payment for the insurance. The amount Y that the company earns on a randomly selected policy of this type is $250 per year, less the $100,000 that it must pay if the insured dies. The Chart Below is the probability distribution of Y

Calculate the expected value of Y. Explain what this results means for the insurance company.


A life insurance company sells a term insurance policy to 21-year old males that pays $100,00 if th

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