Homework Answers
Question 2
Probability of accident=p=0.30
Consumption in case of accident=C1=4000-3000=$1000
Utility in case of accident=U(1000)=1000^0.80=251.1886 utils
Probability of no accident=1-p=0.70
Consumption in case of no accident=C2=4000
Utility in case of no accident=U(4000)=4000^0.80=761.4616 utils
Expected consumption=p*C1+(1-p)*C2=0.30*1000+0.70*4000=$3100
Expected Utility=p*U(1000)+(1-p)*U(4000)=0.30*251.1886+0.70*761.4616=608.3797 or 608 utils
Question 3
Actuarially fair premium=Insurance amount*p=3000*30%=$900
Question 4
Probability of accident=p=0.30
Consumption in case of accident=C1=4000-3000-900+3000=$3100
Utility in case of accident=U(3100)=1000^0.80=620.9968 utils
Probability of no accident=1-p=0.70
Consumption in case of no accident=C2=4000-900=$3100
Utility in case of no accident=U(3100)=3100^0.80=620.9968 utils
Expected consumption=p*C1+(1-p)*C2=0.30*3100+0.70*3100=$3100
Expected Utility=p*U(3100)+(1-p)*U(3100)=U(3100)=620.9968 or 621 utils
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Please use questions 2 & 3 to answer question 4-- show work
clearly (I solved it...
Please answer question 4 Victoria has $2000 to put toward consumption this month. She believes there...
Please answer question 4
Victoria has $2000 to put toward consumption this month. She believes there is a 40% chance she will have a bike accident this month, in which case she will incur medical costs of $1500 (leaving her with $500 to put toward consumption). Victoria's utility over consumption is given by where c is consumption (in dollars). In the absence of any insurance, the expected value of Victoria's consumption this month is $ 14 utility Victoria receives from...
Victoria has $2000 to put toward consumption this month. She believes there is a 40% chance...
Victoria has $2000 to put toward consumption this month. She believes there is a 40% chance she will have a bike accident this month, in which case she will incur medical costs of $1500 (leaving her with $500 to put toward consumption). Victoria's utility over consumption is given by where c is consumption (in dollars). In the absence of any insurance, the expected value of Victoria's consumption this month is $ utility Victoria receives from her consumption this month is...
Victoria has $2000 to put toward consumption this month. She believes there is a 40% chance...
Victoria has $2000 to put toward consumption this month. She believes there is a 40% chance she will have a bike accident this month, in which case she will incur medical costs of $1500 (leaving her with $500 to put toward consumption). Victoria's utility over consumption is given by where c is consumption (in dollars). In the absence of any insurance, the expected value of Victoria's consumption this month is $ utility Victoria receives from her consumption this month is...
Question 8 3 pts Like Victoria from the previous questions, David has $2000 to put toward...
Question 8 3 pts Like Victoria from the previous questions, David has $2000 to put toward consumption this month. Also like Victoria, David believes there is a 40% chance he will have a bike accident this month, in which case he expects to incur medical costs of $1500 (leaving him with $500 to put toward consumption). Unlike Victoria, though, David's utility over consumption is given by Suppose again that the premium for $1500 in insurance coverage is $750, and that...
Consumption-Smoothing Benefits of Insurance. Amy's utility function is where C is consumption and is given by...
Consumption-Smoothing Benefits of Insurance. Amy's utility function is where C is consumption and is given by c-Income-Expenses. Amy's income is $40,000 and there is a 2% chance that she will be involved in a catastrophic accident that will cost her $30,000 of medical expenses Throughout this question, keep at least 3 digits after the decimal point in your answers. (a) What is Amy's expected utility if she doesn't have insurance? Calculate the actuarially fair premium for a full coverage insurance....
er 23 for Credit Question 3 (of 3) value: 33.34 points In calculating insurance premiums, the...
er 23 for Credit Question 3 (of 3) value: 33.34 points In calculating insurance premiums, the actuarially fair insurance premium is the premium that results in a zero NPV for both the insured and the insurer. As such, the present value of the expected loss is the actuarially fair insurance premium. Suppose your company wants to insure a building worth $420 million. The probability of loss is 1.41 percent in one year, and the relevant discount rate is 3.5 percent....
Please i need help with this question,2nd time of posting,please no spam of u related answers,...
Please i need help with this question,2nd time of
posting,please no spam of u related answers,
Thanks.
4· P.T. Barnum is concerned about the health of his star trapeze artist. If the artist is capable of performing a triple somersault, PT's revenues will be m2. If however his star crashes and is unable to perform, revenues will only be mi. Lloyds of London is willing to offer PT insurance on the following terms the premium for every dollar of insurance...
Question 9 6 pts Devah lives for two periods: period 1 in which she works and...
Question 9 6 pts Devah lives for two periods: period 1 in which she works and earns income, and period 2 in which she is retired and earns no income. At the start of her life, her utility over consumption is given by where c1 and c2 are consumption in periods 1 and 2, respectively (both measured in dollars), and S is a measure of myopia or "present bias" (0 1). Assume there is no time discounting. During period 1,...
Please Answer and show work. Question 4 6 pts A green leaf absorbs sunlight. The average...
Please Answer and show work.
Question 4 6 pts A green leaf absorbs sunlight. The average wavelength of the sunlight absorbed is 504 nm (nanometers). The sunlight absorbed on a cloudy day has an average intensity of 327 W/m2 (W = watt. 1 watt = 1/s). Calculate the average number of photons absorbed per square nm of leaf surface area per second. That is (#photons absorbed)/(s•nm2). Round your number of photons to the nearest WHOLE number. Do not include the...
please use the information from questions 3, 4, and 5 to answer question 6 Question 3...
please use the information from questions 3, 4, and 5 to
answer question 6
Question 3 0.3 pts As described above, the country of Irvineland has an income tax rate of 30% on the first $30,000 of taxable income, 40% on the next $30,000 in taxable income, and 50% on all taxable income above $60,000. Irvineland allows a standard deduction of $12,000 for single taxfilers. Zed Zot has gross income of $70,000. As a single person, he takes a standard...
Please answer question 4
Victoria has $2000 to put toward consumption this month. She believes there is a 40% chance she will have a bike accident this month, in which case she will incur medical costs of $1500 (leaving her with $500 to put toward consumption). Victoria's utility over consumption is given by where c is consumption (in dollars). In the absence of any insurance, the expected value of Victoria's consumption this month is $ 14 utility Victoria receives from...
Victoria has $2000 to put toward consumption this month. She believes there is a 40% chance she will have a bike accident this month, in which case she will incur medical costs of $1500 (leaving her with $500 to put toward consumption). Victoria's utility over consumption is given by where c is consumption (in dollars). In the absence of any insurance, the expected value of Victoria's consumption this month is $ utility Victoria receives from her consumption this month is...
Victoria has $2000 to put toward consumption this month. She believes there is a 40% chance she will have a bike accident this month, in which case she will incur medical costs of $1500 (leaving her with $500 to put toward consumption). Victoria's utility over consumption is given by where c is consumption (in dollars). In the absence of any insurance, the expected value of Victoria's consumption this month is $ utility Victoria receives from her consumption this month is...
Question 8 3 pts Like Victoria from the previous questions, David has $2000 to put toward consumption this month. Also like Victoria, David believes there is a 40% chance he will have a bike accident this month, in which case he expects to incur medical costs of $1500 (leaving him with $500 to put toward consumption). Unlike Victoria, though, David's utility over consumption is given by Suppose again that the premium for $1500 in insurance coverage is $750, and that...
Consumption-Smoothing Benefits of Insurance. Amy's utility function is where C is consumption and is given by c-Income-Expenses. Amy's income is $40,000 and there is a 2% chance that she will be involved in a catastrophic accident that will cost her $30,000 of medical expenses Throughout this question, keep at least 3 digits after the decimal point in your answers. (a) What is Amy's expected utility if she doesn't have insurance? Calculate the actuarially fair premium for a full coverage insurance....
er 23 for Credit Question 3 (of 3) value: 33.34 points In calculating insurance premiums, the actuarially fair insurance premium is the premium that results in a zero NPV for both the insured and the insurer. As such, the present value of the expected loss is the actuarially fair insurance premium. Suppose your company wants to insure a building worth $420 million. The probability of loss is 1.41 percent in one year, and the relevant discount rate is 3.5 percent....
Please i need help with this question,2nd time of
posting,please no spam of u related answers,
Thanks.
4· P.T. Barnum is concerned about the health of his star trapeze artist. If the artist is capable of performing a triple somersault, PT's revenues will be m2. If however his star crashes and is unable to perform, revenues will only be mi. Lloyds of London is willing to offer PT insurance on the following terms the premium for every dollar of insurance...
Question 9 6 pts Devah lives for two periods: period 1 in which she works and earns income, and period 2 in which she is retired and earns no income. At the start of her life, her utility over consumption is given by where c1 and c2 are consumption in periods 1 and 2, respectively (both measured in dollars), and S is a measure of myopia or "present bias" (0 1). Assume there is no time discounting. During period 1,...
Please Answer and show work.
Question 4 6 pts A green leaf absorbs sunlight. The average wavelength of the sunlight absorbed is 504 nm (nanometers). The sunlight absorbed on a cloudy day has an average intensity of 327 W/m2 (W = watt. 1 watt = 1/s). Calculate the average number of photons absorbed per square nm of leaf surface area per second. That is (#photons absorbed)/(s•nm2). Round your number of photons to the nearest WHOLE number. Do not include the...
please use the information from questions 3, 4, and 5 to
answer question 6
Question 3 0.3 pts As described above, the country of Irvineland has an income tax rate of 30% on the first $30,000 of taxable income, 40% on the next $30,000 in taxable income, and 50% on all taxable income above $60,000. Irvineland allows a standard deduction of $12,000 for single taxfilers. Zed Zot has gross income of $70,000. As a single person, he takes a standard...
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