#3

There is a 0.9984 probability that a randomly selected 27-year-old male lives through the year. A life insurance company charges $164 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $80,000 as a death benefit. Complete parts (a) through (c) below. a. From the perspective of the 27-year-old male, what are the monetary values corresponding to the two events of surviving the year and not surviving? The value corresponding to surviving the year is $ The value corresponding to not surviving the year is $ (Type integers or decimals. Do not round.) b. If the 27-year-old male purchases the policy, what is his expected value? The expected value is $ (Round to the nearest cent as needed.) es c. Can the insurance company expect to make a profit from many such policies? Why? because the insurance company expects to make an average profit of $| | on every 27-year-old male it insures for 1 year. (Round to the nearest cent as needed.) iry