Question

Kyle has to make a decision about his health insurance. Under one plan, the monthly cost...

Kyle has to make a decision about his health insurance. Under one plan, the monthly cost of insurance is $15, but if he visits a doctor, he has to pay $50 for an office visit.

Kyle estimates that he has a 0.05 probability of needing to visit a doctor in any given month.

What is the expected monthly value of this plan for Kyle?

A. 15(0.95)+50(0.05)=$16.7515(0.95)+50(0.05)=$16.75

B. 15(0.95)+65(0.05)=$17.5015(0.95)+65(0.05)=$17.50

C. (15+50)(0.05)=$3.25(15+50)(0.05)=$3.25

D. (15+50)(0.95)=$61.75

Math   Statistics-And-Probability   
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TOPIC:Expectation of random variables.

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