Rhoda Ruyner owns a $200,000 home and has a 2% chance of experiencing a loss that destroys her ho...
Rhoda Ruyner owns a $200,000 home and has a 2% chance of experiencing a loss that destroys her home in any given year. Assume that only one loss per year can occur and that if a loss occurs, her home is totally destroyed. Suppose that Rhoda purchases a full insurance contract from Acme Insurance for an actuarially fair premium. This contract would pay losses due to the total destruction of Rhoda’s home. Assume that Rhoda’s contract is the only insurance contract that Acme Insurance sold. What is the actuarially fair premium that Acme Insurance will charge Rhoda in the coming year? Show all calculations. Wile E., who owns the same type of house and faces the same loss distribution as Rhoda in the question above, also purchases full insurance for an actuarially fair premium from Acme Insurance. We assume that the two houses are independent of one another. Show all calculations. Create a probability distribution table of possible outcomes for Acme Insurance if Acme sells insurance to both Rhoda and Wile E. What is the expected loss for Acme Insurance if Acme sells insurance to both Rhoda and Wile E.? Now suppose Wile E. has a 4% chance of experiencing a total loss in any given year. Suppose Acme Insurance still offers Wile E. and Rhoda the same insurance contract and charges them the same premium; in other words, Acme Insurance put Rhoda and Wile E. into the same risk pool. Show all calculations. Create a probability distribution table of possible outcomes for Acme Insurance if Acme sells insurance to both Rhoda and Wile E. What premium amount must Wile E. and Rhoda each individually pay if Acme Insurance wants to “break-even”? Will Wile E. purchase this contract if he is charged the “break-even” premium? Will Rhoda purchase this contract if she is charged the “break-even” premium? Briefly explain your reason.
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Rhoda Ruyner owns a $200,000 home and has a 2% chance of experiencing a loss that destroys her ho...
1. Rhoda Ruyner owns a $200,000 home and has a 2% chance of experiencing a loss...
1. Rhoda Ruyner owns a $200,000 home and has a 2% chance of experiencing a loss that destroys her home in any given year. Assume that only one loss per year can occur and that if a loss occurs, her home is totally destroyed. Suppose that Rhoda purchases a full insurance contract from Acme Insurance for an actuarially fair premium. This contract would pay losses due to the total destruction of Rhoda’s home. Assume that Rhoda’s contract is the only...
Your utility function is given by U = , where C is consumption. You make $175,000...
Your utility function is given by U = , where C is consumption. You make $175,000 per year and enjoy jumping off bridges attached to a bungee cord. There's a 10% chance that, in the next year, you'll break both legs and will incur medical costs of $30,000 and will lose an additional $60,000 from missing work because of the loss of a working pair of legs for half the year. A.) What is your expected utility without insurance for...
UCLA WINTER 2020 Problem Set 6 Due in the beginning of class on Thursday, March 12...
UCLA WINTER 2020 Problem Set 6 Due in the beginning of class on Thursday, March 12 1. Consider a small town that has only two Sushi restaurants, A and B. Suppose that it costs $3 to make each sushi (for each store) and that the relation between sales in each month (g. measured in thousands) and price (p, measured in dollars) for each firm is 9i = 12 - P:+Pj. (a) What is each store's monthly profit as a function...
A homeowners' policy will typically pay up to $500 per plant that is damaged by a...
A homeowners' policy will typically pay up to $500 per plant that is damaged by a covered peril. This is an example of: an aggregate dollar limit an open perils dollar limit C. a specific dollar limit a mixed dollar limit none of the above e. You purchase an annuity for which you will make one payment of $15,000 on your 50 birthday. The annuity will start paying you $400 a month on your 67" birthday until you die. What...
A. Issues [1] In addition to damages for one year's notice period, can a trial judge...
A. Issues [1] In addition to damages for one year's notice period, can a trial judge award significant damages for the mere fact of an employee's dismissal, or for the stigma that that dismissal brings? Or for the employer thereafter competing with the ex-employee for the clients, before the ex-employee has got a new job? B. Basic Facts [2] This is an appeal from 2009 ABQB 591 (CanLII), 473 A.R. 254. [3] Usually a judgment recites facts before law. But...
SYNOPSIS The product manager for coffee development at Kraft Canada must decide whether to introduce the...
SYNOPSIS The product manager for coffee development at Kraft Canada must decide whether to introduce the company's new line of single-serve coffee pods or to await results from the product's launch in the United States. Key strategic decisions include choosing the target market to focus on and determining the value proposition to emphasize. Important questions are also raised in regard to how the new product should be branded, the flavors to offer, whether Kraft should use traditional distribution channels or...
13) The cost the Almy type of market 7) The market is an example of A)...
13) The cost the Almy type of market 7) The market is an example of A) mattress: a monopoly B) com a perfectly competitive C) car insurance an oligopoly D) cell phone; a perfectly competitive 5) airplane manufacturing a monopolistically competitive 8) What is the difference between perfect competition and monopolistic competition? A) Perfect competition has a large number of small firms while monopolistic competition does not in monopolistic competition, firms produce identical goods, while in perfect competition, firms produce...
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Please read the article and answer about questions. You and the Law Business and law are...
Please read the article and answer about questions. You and the Law Business and law are inseparable. For B-Money, the two predictably merged when he was negotiat- ing a deal for his tracks. At other times, the merger is unpredictable, like when your business faces an unexpected auto accident, product recall, or government regulation change. In either type of situation, when business owners know the law, they can better protect themselves and sometimes even avoid the problems completely. This chapter...
UCLA WINTER 2020 Problem Set 6 Due in the beginning of class on Thursday, March 12 1. Consider a small town that has only two Sushi restaurants, A and B. Suppose that it costs $3 to make each sushi (for each store) and that the relation between sales in each month (g. measured in thousands) and price (p, measured in dollars) for each firm is 9i = 12 - P:+Pj. (a) What is each store's monthly profit as a function...
A homeowners' policy will typically pay up to $500 per plant that is damaged by a covered peril. This is an example of: an aggregate dollar limit an open perils dollar limit C. a specific dollar limit a mixed dollar limit none of the above e. You purchase an annuity for which you will make one payment of $15,000 on your 50 birthday. The annuity will start paying you $400 a month on your 67" birthday until you die. What...
A. Issues [1] In addition to damages for one year's notice period, can a trial judge award significant damages for the mere fact of an employee's dismissal, or for the stigma that that dismissal brings? Or for the employer thereafter competing with the ex-employee for the clients, before the ex-employee has got a new job? B. Basic Facts [2] This is an appeal from 2009 ABQB 591 (CanLII), 473 A.R. 254. [3] Usually a judgment recites facts before law. But...
SYNOPSIS The product manager for coffee development at Kraft Canada must decide whether to introduce the company's new line of single-serve coffee pods or to await results from the product's launch in the United States. Key strategic decisions include choosing the target market to focus on and determining the value proposition to emphasize. Important questions are also raised in regard to how the new product should be branded, the flavors to offer, whether Kraft should use traditional distribution channels or...
13) The cost the Almy type of market 7) The market is an example of A) mattress: a monopoly B) com a perfectly competitive C) car insurance an oligopoly D) cell phone; a perfectly competitive 5) airplane manufacturing a monopolistically competitive 8) What is the difference between perfect competition and monopolistic competition? A) Perfect competition has a large number of small firms while monopolistic competition does not in monopolistic competition, firms produce identical goods, while in perfect competition, firms produce...
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