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a . If the loss ratio on a line of property insurance is 7 6 percent, the loss adjustment expense is 1 2 . 8

a. If the loss ratio on a line of property insurance is 76 percent, the loss adjustment expense is 12.8 percent, and the ratio of commissions and other acquisitions expenses is 15 percent, is this line profitable?
b. How does your answer to part (a) change if investment yields of 9 percent are added?

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