[Solved] Based on historical data, an insurance co

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 03, 2024

Based on historical data, an insurance company estimates that a particular customer has a 3 . 7 % likelihood of having an accident in the

Based on historical data, an insurance company estimates that a particular customer has a

3.7 %

likelihood of having an accident in the next year, with the average insurance payout being $

2300 .

If the company charges this customer an annual premium of $

230,

what is the company's expected value of this insurance policy?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

Step: 3

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

Handbook Of Financial Intermediation And Banking

Authors: Anjan V. Thakor, Arnoud Boot

1st Edition

ISBN: 0444515585, 978-0444515582

More Books

Students also viewed these Finance questions

Question

★★★★★

How do you "manage communication" and how do you use "communication to manage"?

Answered: 1 week ago

Question

★★★★★

Between what values do the IQ scores of 95% of all rural Midwest seventhgraders lie?

Answered: 1 week ago

Question

★★★★★

=+P ., ( A) = = #[m: 1 m n, mA]; among the first n integers, the proportion that lie in A is just P.( A). Then P, is a discrete probability measure. The set A has density (2.35) D(A) = lim P(A),...

Answered: 1 week ago

Question

★★★★★

A project manager has compiled a list of major activities that will be required to install a computer information system in her firm. The list includes estimated completion times for activities and...

Answered: 1 week ago

Question

★★★★★

CP 68 Windy City Insurance Ltd. has received a fireloss claim of $45,000 from Balton Corp. A fire destroyed Baltons inventory on May 25, 2019. Balton has an average gross profit of 331/3 per cent....

Answered: 1 week ago

Question

★★★★★

What is present Value at T0 for 100 starting at t1 to infinity, growing at 5%? Cost of capital is 15%.

Answered: 1 week ago

Question

★★★★★

The number of days rain per month in London varies depending on the time of year. The data shows the number of wet days per month. 17 13 11 14 13 11 13 12 13 14 16 16 (a) For this data, find (a) (i)...

Answered: 1 week ago

Question

★★★★★

Mark Gershon, owner of a musical instrument distributorship, thinks that demand for guitars may be related to the number of television appearances by the popular group Maroon 5 during the previous...

Answered: 1 week ago

Question

★★★★★

Write one short paragraphs about the target market segments for your client and why you think this company and product will be successful. Are there economic, social, or other trends that make this a...

Answered: 1 week ago

Question

★★★★★

Quiz Instructions: Term Structure Models II and Introduction to Credit Derivatives Questions 1 and 2 should be answered by building and calibrating a 10-period Black-Derman-Toy model for the...

Answered: 1 week ago

Question

★★★★★

a1 a2 a3 15. (23) Let A = b b2 b3 and B = = C1 4a1b1 4a2+ b2 4a3+b3 C2 C3 C1 C2 C3 3b1 3b2 3b3 If det(B) = 6, then (1) det(A) = and (4) rank(A-1) = (2) det(2ABA-) = (3) det(BBT) =

Answered: 1 week ago

Question

★★★★★

C What kinds of mediated communication do both hearing and deaf people share? Can individuals use them to overcome communication barriers between hearing and deaf people?

Answered: 1 week ago

Question

★★★★★

why we face Listening Challenges?

Answered: 1 week ago

Question

★★★★★

what is Listening in Context?

Answered: 1 week ago

Previous Question Next Question