An insurance company sells a life insurance policy that pays out $500,000 if the policyholder dies within
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An insurance company sells a life insurance policy that pays out $500,000 if the policyholder dies within the next 10 years. The company charges an annual premium of $1,500 for this policy. The probability that a 30-year-old policyholder will die within the next 10 years is 0.02. If the insurance company sells this policy to 1,000 individuals, what is the expected profit or loss for the insurance company?
Related Book For
Quantitative Analysis for Management
ISBN: 978-0132149112
11th Edition
Authors: Barry render, Ralph m. stair, Michael e. Hanna
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