Problem #7 (Insurance Companies) (a) An insurance companys projected loss ratio is 77.5 percent and its expense ratio is 23 percent. The company estimates that dividends to policyholders will be 5 percent. What must be the minimum yield on investments to achieve a positive operating ratio? (b) Another insurance company collected $3.6 million in premiums and disbursed $1.96 million in losses. Expenses amounted to 6.6 percent and dividends paid to policyholders totaled 1.2 percent. The total income generated from the companys investments was $170,000 after all expenses were paid. What is the net profitability in dollars?