- #1

- 3

- 0

A 20-year-old male purchases a 1-year life insurance policy worth 250,000 dollars. The insurance company determines that he will survive the policy period with probability 0.9986.

(a) If the premium for the policy is 410 dollars, what is the expected profit for the insurance company?

i did $410* 0.9986- *250,000*0.0014

but i don't think it's right?

b) At what value should the company set its premium so its expected profit will be 240 dollars per policy for 20-year-old males?

and i am not really sure how to approach this one

and also

A box contains 3 defective bulbs and 9 good bulbs. If 5 bulbs are drawn from the box without replacement, what is the expected number of defective bulbs?

i did 5 *(3/9) what else do i need to consider?

(a) If the premium for the policy is 410 dollars, what is the expected profit for the insurance company?

i did $410* 0.9986- *250,000*0.0014

but i don't think it's right?

b) At what value should the company set its premium so its expected profit will be 240 dollars per policy for 20-year-old males?

and i am not really sure how to approach this one

and also

A box contains 3 defective bulbs and 9 good bulbs. If 5 bulbs are drawn from the box without replacement, what is the expected number of defective bulbs?

i did 5 *(3/9) what else do i need to consider?

Last edited: