Solved: Exercises 57 and 58 refer to the following setting. In Exercises 14 and 18 of

QUESTION:

Exercises 57 and 58 refer to the following setting. In Exercises 14 and 18 of Section 6.1, we examined the probability distribution of the random variable X = the amount a life insurance company earns on a randomly chosen 5-year term life policy. Calculations reveal that mX = $303.35 and sX = $9707.57. Life insurance The risk of insuring one persons life is reduced if we insure many people. Suppose that we insure two 21-year-old males, and that their ages at death are independent. If X1 and X2 are the insurers income from the two insurance policies, the insurers average income W on the two policies is W = X1 + X2 2 Find the mean and standard deviation of W. (You see that the mean income is the same as for a single policy but the standard deviation is less.)