1. Given

E(I) = $4,020

I_H = $5,000

p = 20%

What is the value ofI_S?

2. Given

Full insurance

I_H - I_H' = $200

I_H - I_S = $800

p = 25%

Is this insurance policy fair or unfair?

Explain how you arrived at your answer.

3. Given

E(I) = $3,710

r = $300

I_H = $3,200

q = $1,000

I_S' = $800

Is this insurance full or partial?

Explain how you arrived at your answer.

Is this insurance fair or unfair?

Explain how you arrived at your answer.

4. Given

Fair insurance

E(I) = $4,000

I_S' = $3,000

Is this insurance full or partial?

Explain how you arrived at your answer.