An insurance company issues life insurance policies in three separate categories: standard, preferred, and ultra-preferred.

Of the company’s policyholders, 50% are standard, 40% are preferred, and 10% are ultra-preferred.

Each standard policyholder has probability 0.010 of dying in the next year, each preferred policyholder has probability 0.005 of dying in the next year, and each ultra-preferred policyholder has probability 0.001 of dying in the next year.

A policyholder dies in the next year. What is the probability that the deceased policyholder was ultra-preferred?

(A) 0.0001

(B) 0.0010

(C) 0.0071

(D) 0.0141

(E) 0.2817

iwould say 0.0010

Nope, keep trying.

0.0001?

Nope, that’s not it.

Please show how you arrived at the answer.

It’s (D) 0.0141.

10 x 0.001 = 0.01

40 x 0.005 = 0.2

50 x 0.01 = 0.5

Add these together: 0.01 + 0.2 + 0.5 = 0.71

Now divide the ultra-preferred by the total: 0.01/0.71 = 0.01408 or 0.0141

You are correct, Big Daddy.

50 x .010 = .0050

40 x .005 = .0020

10 x .001 = .0001

Total: 1 = .0071

1/71 – 0.0141 So the answer is D.

You are today’s winner.