An individual has $2000 in physical assets, and $600 in cash initially. This person faces the following loss distribution to the wealth. Full insurance is available at $600
Probability Loss
0.5 0
0.1 200
0.2 400
0.1 1000
0.1 2000
The Individual can also buy partial insurance with i. a $200 deductible, or ii. 75% coinsurance, or iii. Upper limit on coverage, with the limit being $1000. The premium on each partial coverage policy is $450.
Required:
Provide a ranking of the four types of policies for the individual, in terms of preference if the preference function is given by U(FW) = LN(1+FW), where FW is final wealth of the individual.
Answers: 3
Other questions on the subject: Business
Business, 22.06.2019 02:00, 544620
Answer the following questions using the information below: southwestern college is planning to hold a fund raising banquet at one of the local country clubs. it has two options for the banquet: option one: crestview country club a. fixed rental cost of $1,000 b. $12 per person for food option two: tallgrass country club a. fixed rental cost of $3,000 b. $8.00 per person for food southwestern college has budgeted $1,800 for administrative and marketing expenses. it plans to hire a band which will cost another $800. tickets are expected to be $30 per person. local business supporters will donate any other items required for the event. which option has the lowest breakeven point?
Answers: 1
Business, 22.06.2019 11:10, AM28
Your team has identified the risks on the project and determined their risk score. the team is in the midst of determining what strategies to put in place should the risks occur. after some discussion, the team members have determined that the risk of losing their network administrator is a risk they'll just deal with if and when it occurs. although they think it's a possibility and the impact would be significant, they've decided to simply deal with it after the fact. which of the following is true regarding this question? a. this is a positive response strategy. b. this is a negative response strategy. c. this is a response strategy for either positive or negative risk known as contingency planning. d. this is a response strategy for either positive or negative risks known as passive acceptance.
Answers: 2
Business, 22.06.2019 18:10, maddihamidou
Consumers who participate in the sharing economy seem willing to interact with total strangers. despite safety and privacy concerns, what do you think is the long-term outlook for this change in the way we think about interacting with people whom we don't know? how can businesses to diminish worries some people may have about these practices?
Answers: 1
Business, 22.06.2019 23:30, SmolBeanPotato
Shelby bought her dream car, a 1966 red convertible mustang, with a loan from her credit union. if shelby paid 5.1% and the bank earned a real rate of return of 3.5%, what was the inflation rate over the life of the loan?
Answers: 2
You know the right answer?
An individual has $2000 in physical assets, and $600 in cash initially. This person faces the follow...
Questions in other subjects:
Mathematics, 16.07.2021 15:30
