There is a 0.9991 probability that a randomly selected 28?-year-old male lives t
ID: 2946428 • Letter: T
Question
There is a 0.9991 probability that a randomly selected 28?-year-old male lives through the year. A life insurance company charges ?$151 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 28-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 $__
Explanation / Answer
From the perspective of 28 year old male is
The value corresponding to surviving the year is -$ 151 ( if he survives he has to pay the company $ 151)
The value corresponding to not surviving the year is $ 80,000 ( if he doesn’t survive the insurance company pays $ 80,000)
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