Mathematics, 25.08.2020 20:01, ayoismeisalex

Avicenna, a major insurance company, offers five-year life insurance policies to 65-year-olds. If the holder of one of these policies dies before the age of 70, the company must pay out $26,500 to the beneficiary of the policy. Executives at Avicenna are considering offering these policies for $497 each. Suppose that for
each holder of a policy there is a 2% chance that they will die before the age of 70 and a 98% chance they will live to the age of 70.

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Avicenna, a major insurance company, offers five-year life insurance policies to 65-year-olds. If th...