Question: Question 5 (3 points) Consider a continuous term life insurance policy that pays $200,000 at the time of death if death occurs in the next

Question 5 (3 points) Consider a continuous term life insurance policy that pays $200,000 at the time of death if death occurs in the next 70 years. The insurance company is to receive a continuous premium of $2370 per year until death or 70 years, whichever is first. The continuously compounding interest rate is 6%. If the time of death is uniformly distributed over the next 100 years, what is the probability that the present value of the net loss on this policy will be negative for the insurance company? Enter the probability as a decimal value between 0 and 1 correct to 4 digits, so 12.34% is 0.1234. Your Answer: Answer Question 5 (3 points) Consider a continuous term life insurance policy that pays $200,000 at the time of death if death occurs in the next 70 years. The insurance company is to receive a continuous premium of $2370 per year until death or 70 years, whichever is first. The continuously compounding interest rate is 6%. If the time of death is uniformly distributed over the next 100 years, what is the probability that the present value of the net loss on this policy will be negative for the insurance company? Enter the probability as a decimal value between 0 and 1 correct to 4 digits, so 12.34% is 0.1234. Your
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
