Your company sells life insurance you charge a 50 year old, Ask an Expert

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Your company sells life insurance. You charge a 50 year old man $75 dollars for a one year, $100,000 policy. If he dies over the next year you pay out $100,000. If he lives you keep the $75. Based on historical data (relative frequency approximation) the average 50 Year old man has a .9997 probability of living through the year. a) what is your expected profit of this policy? b) What is the break-even price of such a policy? What price should you charge to produce an expected profit of zero?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92057324

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