There is a 0.9986 probability a randomly selected 30-year old male live through the year. An insurance company called, None-of-your-Business, charges $161 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $100,000 as a death benefit. Assume that the company sells 1300 such policies to 30-year-old males, so it collects $209,300 in policy payments. The company will make a profit if the number of deaths in this group is two or fewer.<\/p>\n
a. What is the mean number of deaths in such groups of 1300 males?<\/p>\n
b. Use the Poisson distribution to find the probability that the company make a profit from the 1300 policies.<\/p>\n
c. Use the binomial distribution to find the probability that the company makes a profit from the 1300 policies. Compare this result to that from part b.<\/p>\n","protected":false},"excerpt":{"rendered":"
There is a 0.9986 probability a randomly selected 30-year old male live through the year. An insurance company called, None-of-your-Business, charges $161 for insuring that the male will live through the year. If the male does not survive the year, Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-75830","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/75830","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=75830"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/75830\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=75830"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=75830"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=75830"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}