Examlex
A company that sells annuities must base the annual payout on the probability distribution of the length of life of the participants in the plan.Suppose the probability distribution of the lifetimes of the participants is approximately a normal distribution with a mean of 68 years and a standard deviation of 3.5 years.What proportion of the plan recipients die before they reach the standard retirement age of 65?
Binomial Experiment
A statistical experiment that satisfies four conditions: a fixed number of trials, only two possible outcomes, independence of trials, and a constant probability of success.
Independent Trials
Experiments or trials in which the outcome of one trial does not affect the outcome of any other trials.
Binomial Experiment
A statistical experiment that has two possible outcomes for each trial and a fixed number of trials, where each trial is independent of the others.
Probability
A numerical expression of an event's probability, with the scale going from 0, symbolizing that the event cannot occur, to 1, signifying guaranteed occurrence.
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