Question 2 A company insures 1000 independent and identically distributed exposure units each with a mean of $400 and variance of 578,000. Suppose the equity holders of the insurer supply $30,000 to allow the company to underwrite the risks, how much must the insurer charge each policyholder in order to maintain a probability of no larger than 0.01 that the insurer will not have enough assets in order to pay all claims. Question 3 Assume an insurer writes n policies. The data in the table below shows historical loss information from a previous year. How much should the insurer charge each policyholder to be 99.5 percent sure it can meet all its claim obligations at the end of the policy year assuming n=1000? Rework your answer for n=1500, n=2000. Discuss what happens to the premium per policyholder as you adjust n. Num 12 Range Start End 0 400 400 800 800 1200 1200 1600 45 42 37 1600 2000 26 2000 2400 16 2400 2800 8 2800 3200 4 3200 3600 1 0 3600+