What should the company charge such policyholder

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Reference no: EM131937438

An insurance company issues a policy which pays $50,000 at the end of the year of death, if death should occur during the next two years. The probability that a 25-year-old will live for one year is 0.99936, and the probability he will live for two years is 0.99858. What should the company charge such a policyholder to earn 11% on its investment?

Reference no: EM131937438

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