Question
Pintar Company owns real estate valued at RM 1,000,000. They estimate that their property losses have the following distribution: Losses (RM) Probability 1,000,000 0.001 500,000
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Pintar Company owns real estate valued at RM 1,000,000. They estimate that their property losses have the following distribution:
| Losses (RM) | Probability |
| 1,000,000 | 0.001 |
| 500,000 | 0.010 |
| 250,000 | 0.050 |
| 10,000 | 0.100 |
| 0 | 0.839 |
What is the expected value of Pintar Companys losses?
If insurance for this loss were available for a price of RM10,000 per year, do you think that Pintar Company would want to buy it? Why or why not?
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Finance Led Capitalism Shadow Banking Re Regulation And The Future Of Global Markets
Authors: Robert Guttmann
1st Edition
1137398566, 978-1137398567
