Assume the amount you can spend on car payments is 50% of your monthly surplus.
1 answer:
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Answer:
The z-score corresponding to an observed value of x of 2 is 0.215.
Step-by-step explanation:
We are given that a variable x has the possible observations shown below;
Possible observations of X: -3, -1, 0, 1, 1, 2, 4, 4, 5.
Firstly, we will find the mean and the standard deviation of X, i.e;
Mean of X, () =
=
= = 1.44
Standard deviation of X, () =
=
= 2.603
Now, the z-score corresponding to an observed value of x of 2 is given by;
z-score =
= = <u>0.215.</u>
Answer:
The insurance company should charge $1,873.5.
Step-by-step explanation:
Expected earnings:
1 - 0.99813 = 0.00187 probability of the company losing $1 million(if the client dies).
0.99813 probability of the company earning x(price of the insurance).
What premium would an insurance company charge to break even on a one-year $1 million term life insurance policy?
Break even means that the earnings are 0, so:
The insurance company should charge $1,873.5.