1. Rocky's Bagels. Inc is a small bagel sandwich restaurant. Rocky is concerned about the risk of employees cutting themselves on the job. Assuming that Rocky has no interest in expanding his Operation. which of the major risk management methods are likely to be most important to Rocky? Which wiii not be appropriate for Rocky? Explain. 2. Holding more economic capital reduces the risk at insolvency for an insurer. Should insurers hold sufcient capital to reduce insolvency risk to zero? Why or why not? 3. State X has recently decided to prohibit the use of age, gentler, and marital status as rating factors for auto insurance premiums. Discuss the potential impact on premiums. the residual market. and availability of insurance. \f10. Marginal Product. inc. has 4.900 workers located at plants in many different locations. Based on historical data. Marginal estimates that the total loss per worker per year is $300 and the standard deation of total losses per worker is moot). Assume that the total loss distribution can be estimated as a normal distribution. a; What are the expected totai losses for Marginal Product for the coming year? b. What is the expected standard deviation uftolal losses for the coming year? c What Is Marginal Product's maximum probable loss at the 95% level? High-risk drivers are oen able to buy insurance at less than their true expected claims costs since their costs are subsidized by Iowriak drivers. What is the potential cost to society when high-risks don't pay all the 005's associated with their bad driving? Pooling arrangements are designed to reduce the risk to. members of the pool. Explain the impact on risk reduction as the number of participants in the pool Increase, aIE other factors equal What happens to the expected cost of risk per participant as the pool size increases? Dene each afne following terms: a. Dened benet plan l]. Dened contribution c. Cash balance plan Provide a descriptive formula for each thhe following reign Total risk: ? + 1']: a. Total risk = D. Discount rate = c. Adjusted NW 3 In what way is the current system of product liability regressive