Calculate the following: (LG 15-6) a. If the loss ratio on a line of property insurance is

Question:

Calculate the following: (LG 15-6)

a. If the loss ratio on a line of property insurance is 73 percent, the loss adjustment expense is 12.5 percent, and the ratio of commissions and other acquisitions expenses is 18 percent, is this line profitable?

b. How does your answer to part

(a) change if investment yields of 8 percent are added?

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