Question
9.Use the following information to answer questions 9.1-9.4. Round to two decimal placeswhen calculating your answer.(4 points) Happy Time Day Camp has the following distribution
9.Use the following information to answer questions 9.1-9.4. Round to two decimal placeswhen calculating your answer.(4 points)
Happy Time Day Camp has the following distribution for its annual liability costs:
| Loss = | $2,000,000 | with probability .0001 |
| $100,000 | with probability .001 | |
| $5,000 | with probability .1 | |
| $0 | with probability .8989 |
9.3 If an insurer offered Happy Time a policy with a $5000 annual deductible, what are the expected claim costs on this policy?
9.4 If an insurer offered Happy Time a policy with a $500,000 limit, what are the expected claim costs on this policy?
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Money Banking And Financial Markets
Authors: Stephen Cecchetti
2nd Edition
0073523097, 9780073523095
