Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. Refer to the following information for this question Annual Data Thousands of Dollars Premiums earned $25,000 Losses incurred $17,000 Expenses/Commissions $7,500 Dividends paid to

2. Refer to the following information for this question

Annual Data

Thousands of Dollars

Premiums earned

$25,000

Losses incurred

$17,000

Expenses/Commissions

$7,500

Dividends paid to policyholders

$750

Investment income on premiums

$1,600

Which of the following is true?

Everything else constant, the maximum expected loss ratio that would yield a profitable line after including investment income is $7,500.

Everything else constant, the maximum expected loss ratio that would yield a profitable line after including investment income is $26,750.

Everything else constant, the maximum expected loss ratio that would yield a profitable line after including investment income is $17,500.

Everything else constant, the maximum expected loss ratio that would yield a profitable line after including investment income is $18,350.

Everything else constant, the maximum expected loss ratio that would yield a profitable line after including investment income is $16,250.

Please show step by step

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Markets And Institutions

Authors: Anthony Saunders, Marcia Cornett

7th Edition

1259919714, 978-1259919718

More Books

Students also viewed these Finance questions