1) You are purchasing an annuity from an insurance company for $1.5million today for your retirement plan. And you expect to receive 20 equal payments beginning at the end of the first year. The guaranteed annual interest rate is 5 percent. The annual payments that you expect to collect are ___________.

$60,181.94.

$114,632.27.

$120,363.88.

$63,292.04.

$88,333.33.

2)

If losses on a particular line of fire insurance were $550 million, premiums earned were $695 million, and loss adjustment expenses were $95 million, the combined ratio would be

Group of answer choices

0.93 implying that this line of insurance is unprofitable.

0.93 implying that this line of insurance is profitable.

1.08 implying that this line of insurance is profitable.

0.15 implying that this line of insurance is profitable.

1.08 implying that this line of insurance is unprofitable.