An insurance company offers a policy with a death benefit of $250,000. The policy has a 10-year
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An insurance company offers a policy with a death benefit of $250,000. The policy has a 10-year term, and the annual premium is $1,200, payable at the beginning of each year. The probability of a policyholder dying within the policy term is 0.02. If the insurance company invests premiums at an annual interest rate of 5%, what is the expected profit for the insurance company per policy?
Related Book For
Statistics For Business Decision Making And Analysis
ISBN: 9780321890269
2nd Edition
Authors: Robert Stine, Dean Foster
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