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have an upfront cost of $90,000. Suppose the bela of the loss is 0 , and the nsk-tree interest rate is 6% a. If the

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have an upfront cost of $90,000. Suppose the bela of the loss is 0 , and the nsk-tree interest rate is 6% a. If the firm is urinsured, what is the NPV of implementing the new policies? b. If the firm is fully insured, what is the NPV of implementing the new policies? c. Given your answer to (b). What is the actuasially fair cost of fulli insurance? d. What is the minimum-size deductible that would leave your firm wth an incentive to inplement the new policies? e. What is the actuarially fair price of an insurance policy with the deduchble in part (d)? a. If the firm is uninsufed, what is the NPV of implementing the new policies? The NPV of implementing the new policies is 5 (Round to the nearest dollar). b. If the firm is fully insured, what is the NPV of implementing the new policies? The NPV of implementing the new policies is 5 (Round to the nearest dollar) c. Given your answer to (b), what is the actuarially fair cost of full insurance? The actuarially fair cost of full insurance is $ (Round to the nearest dollar.) d. What is the minimum-size deductible that would leave your firm with an incentive to implement the new polices? The minimum-size deductible is $ million. (Round to three decimal places) e. What is the actuarially fair price of an insurance policy with the deductible in part (d)? The actuarially fair price of an insurance policy is (Round to the nearest doilar.)

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