Question: There is a 0.9985 probability that a randomly selected 29-year-old male lives through the year. A life insurance company charges $180 for insuring that the

There is a 0.9985 probability that a randomly selected 29-year-old male lives through the year. A life insurance company charges $180 for insuring that the male will live through the year. If the male does not survive theyear, the policy pays out $100,000 as a death benefit.

If the 29-year-old male purchases thepolicy, what is his expectedvalue?

Can the insurance company expect to make a profit from many suchpolicies? Why?

No,

Yes,

-------------------- because the insurance company expects to make an average profit of $---------------------on every 29-year-old male it insures for 1 year.

(Round to the nearest cent asneeded.)

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