Answer:
$ 14.08
Step-by-step explanation:
We have that the policy costs $ 94 and with life insurance with coverage of $ 120,000, to calculate the expected value, we must subtract the value of that life insurance multiplied with the probability of dying (complement of the probability of living) and the policy value multiplied by the probability of staying alive) like this:
120000 * (1 - 0.9991) - 94 * 0.9991 = 14.0846
Which means that the expected value of the policy is $ 14.08
