An insurance company has 1,000 policies on men of age 50. The company estimates that the probability that a man of age 50 dies within a year is. 01. Estimate the number of claims that the company can expect from beneficiaries of these men within a year.

the expected number of claims within a year is 10

Step-by-step explanation:

since the life expectancy of each man is independent from others, then the random variable X = number of man of 50 years who die within a year, follows a binomial distribution. Thus the expected value of X is given by

E (X) = n*p

where

p = probability that a man of age 50 dies within a year = 0.01

n = number of policies on men of age 50 = 1000

replacing values

E (X) = n*p = 0.01 * 1000 = 10

therefore the expected number of claims within a year is 10