MATH 321 Lecture Notes - Lecture 30: Term Life Insurance, Random Variable, Life Insurance
8 Jul 2019
School
Department
Course
Professor
Document Summary
6. 1. 5 compute and interpret the mean of a discrete random variable (1 of 2) Because the mean of a random variable represents what we would expect to happen in the long run, it is also called the expected value, e(x), of the random variable. 6. 1. 5 compute and interpret the mean of a discrete random variable (2 of 2) Example computing the expected value of a discrete random variable. A term life insurance policy will pay a beneficiary a certain sum of money upon the death of the policy holder. These policies have premiums that must be paid annually. Suppose a life insurance company sells a ,000 one year term life insurance policy to a 49-year-old female for . According to the national vital statistics report, vol. 28, the probability the female will survive the year is 0. 99791. Compute the expected value of this policy to the insurance company. blank.
