Life insurance salesman meets his prospective customers separately. At each meeting, he makes the same effort...

Life insurance salesman meets his prospective customers separately. At each meeting, he makes the same effort to persuade the prospective client to be insured. The vendor's understanding after a long term in the insurance business is that the probability of persuading the customer to be insured (probability of success) is 0,1. What is the probability in 4 trials to insure one of them?

Solutions

Expert Solution

Binomial distribution: P(X) = nCx p^x q^n-x

P(a customer buys an insurance), p = 0.1

q = 1 - 0.1 = 0.9

Number of trials, n = 4

P(exactly one is insured) = 4C1 x 0.1 x 0.9³

= 0.2916

orchestra answered 1 year ago

Next > < Previous

Related Solutions

Life insurance salesman meets his prospective customers separately. At each meeting, he makes the same effort...

Life insurance salesman meets his prospective customers separately. At each meeting, he makes the same effort to persuade the prospective client to be insured. The vendor's understanding after a long term in the insurance business is that the probability of persuading the customer to be insured (probability of success) is 0,1. What is the probability in 4 trials to insure one of them?

An insurance agent meets twelve potential customers independently, each of whom is equally likely to purchase...

An insurance agent meets twelve potential customers independently, each of whom is equally likely to purchase an insurance product. Six are interested only in auto insurance, four are interested only in homeowners insurance, and two are interested only in life insurance. The agent makes six sales. Calculate the probability that two are for auto insurance, two are for homeowners insurance, and two are for life insurance.

1. Jim Harvey, your client, owns a life insurance policy on his own life. He has...

1. Jim Harvey, your client, owns a life insurance policy on his own life. He has paid $6,500 in premiums, and the cash surrender value of the policy is $25,000. Jim Harvey borrowed $25,000 from the insurance company, using the cash surrender value as collateral. He is considering canceling the policy in payment of the loan. Jim Harvey would like to know the federal income tax consequences of canceling his insurance policy. Discuss the tax implications. 2. As we know,...

Five years ago, Jason purchased a $400,000 life insurance policy on his life. For each of...

Five years ago, Jason purchased a $400,000 life insurance policy on his life. For each of the following, indicate how much of the $400,000 policy proceeds are included in his gross estate. a) The proceeds are payable to his estate. b) The proceeds were paid to his daughter, but Jason retained the right to change beneficiaries. c) $100,000 of the proceeds are used to pay debts of his estate with the balance paid to his daughter. Jason retained no rights...

Subjects