The probability that a 28-year-old male in the U.S. will die within one year is approximately...

The probability that a 28-year-old male in the U.S. will die within one year is approximately 0.001395. If an insurance company sells a one-year, $30,000 life insurance policy to such a person for $195, what is the company's expectation? (Round your answer to the nearest dollar.).

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Expert Solution

Company's profit when the person lives = 195

company's expectation = 195 * (1 - 0.001395) - 30000 * 0.001395 = $152.8 = $153

orchestra answered 1 year ago

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