Suppose a life insurance company sells a $240,000 one year term life insurance policy to a 25-year old female for $210. the probability that the female survives the year is .999592. compute the expected value of this policy to the insurance company. i thought i would start with x value of 1 - 12, but i'm lost on what my p(x=x) value will be. i can do these when i'm shown a chart, however i'm lost when asked to do them from a story an example would be appreciated. you in advance

$112.08 every year.

Step-by-step explanation:

Let's suppose a game in which we bet a certain amount of money ''A'' to a certain result and the probability of that result is ''p''. If the prize that we get is ''P'' therefore the expected value of gain is  :

Now,let's suppose that the female is ''betting on her death'' ⇒

P(she survives) = 0.999592

P(she doesn't survive) = 1 - 0.999592=

E(25-year old female) =

The negative sign of E is important.It means that every year the 25-year old female will lose $112.08.

Therefore, the expected value of this policy to the insurance company is $112.08 every year.