Assume That 1000 Students, All Healthy, All Age 22, and All

question 40

Multiple Choice

Assume that 1000 students, all healthy, all age 22, and all male, form a life insurance pool to pay $500 to the beneficiaries of any member who dies in the next 365 days. The chance of loss or probability of death for the members of this group is .002. To join the pool a member must pay: (Disregard interest earnings and reserves and assume expenses of operating the insurance pool are 30% of losses) .

• A) $1
• B) $1.30
• C) $3
• D) $2.28

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Definitions:

February

The second month of the year in the Gregorian calendar, typically consisting of 28 days, or 29 in leap years.

Standard Hours Allowed

The predetermined amount of time expected to be required to produce a certain quantity of output under normal working conditions.

Actual Output

The real quantity of goods or services produced by a business during a specific period, as opposed to planned or potential output.

Materials Price Variance

The difference between the actual cost of materials used in production and the standard cost of materials that were expected to be used.