Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help quickly!! Thank you so much in advance! it's all that was provided. a loss matrix table needs to be completed it's the best

Please help quickly!! Thank you so much in advance!

image text in transcribed

image text in transcribed

it's all that was provided. a loss matrix table needs to be completed

it's the best picture I am able to get, you can always zoom in. Please please help!

A firm has the following probability distribution for annual losses due to vandalism: Loss Amount Probability $0 0.55 $5.000 0.40 $10,000 0.05 The firm is considering three options: 1. Partial Insurance > Face amount = $5,000; Premium = $3,000 2. Deductible Insurance > Face amount = $10,000; Deductible - $500; Premium = $3.500 3. Retention plus loss prevention. Loss Prevention cost $400. Probability changes to 70% for $0 loss, 25% for $5,000 loss. $10,000 probability remains the same ***Answer in the text box below: Derive the loss matrix for the firm. Simply copy and paste the below loss matrix into your answer box and then fill out the loss matrix accordingly. After completing the loss matrix - Calculate the Expected Cost of each option? (6 points) Derive the loss matrix for the firm. Simply copy and paste the below loss matrix into your answer box and then fill out the loss matrix accordingly. After completing the loss matrix - Calculate the Expected Cost of each option? (6 points) A firm has the following probability distribution for annual losses due to vandalism: Loss Amount Probability $0 0.55 $5.000 0.40 $10,000 0.05 The firm is considering three options: 1. Partial Insurance > Face amount = $5,000; Premium = $3,000 2. Deductible Insurance > Face amount = $10,000; Deductible - $500; Premium = $3.500 3. Retention plus loss prevention. Loss Prevention cost $400. Probability changes to 70% for $0 loss, 25% for $5,000 loss. $10,000 probability remains the same ***Answer in the text box below: Derive the loss matrix for the firm. Simply copy and paste the below loss matrix into your answer box and then fill out the loss matrix accordingly. After completing the loss matrix - Calculate the Expected Cost of each option? (6 points) Derive the loss matrix for the firm. Simply copy and paste the below loss matrix into your answer box and then fill out the loss matrix accordingly. After completing the loss matrix - Calculate the Expected Cost of each option? (6 points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

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

Performance Measurement Systems Design And Adoption In German Multinational Companies

Authors: Henrik Schirmacher

1st Edition

363182193X,3631828551

More Books

Students also viewed these Finance questions