Question
* Initial welath = 1,000 * Premium loading = 20% of pure premium * U(W) = ln(W) *Probability distribution of Loss Probability Loss 0.5 0
* Initial welath = 1,000 * Premium loading = 20% of pure premium * U(W) = ln(W) *Probability distribution of Loss
| Probability | Loss |
| 0.5 | 0 |
| 0.1 | 80 |
| 0.2 | 160 |
| 0.1 | 400 |
| 0.1 | 800 |
Will a risk averse person prefer (1) no insurance, (2) full insurance, (3) insurance with a 80 deductible, (4) partial insurance with a 25% participation clause, (5) partial insurance with a coverage limit equal to 200?
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Multifractal Detrended Analysis Method And Its Application In Financial Markets
Authors: Guangxi Cao, Ling-Yun He, Jie Cao
1st Edition
9811079153, 978-9811079153
