Question
Refer to the following information for this question: Annual Data Thousands of Dollars Premiums earned $25,000 Losses incurred $17,000 Expenses/Commissions $7,500 Dividends paid to policyholders
Refer to the following information for this question:
Annual Data | Thousands of Dollars |
Premiums earned | $25,000 |
Losses incurred | $17,000 |
Expenses/Commissions | $7,500 |
Dividends paid to policyholders | $750 |
Investment income on premiums | $1,600 |
Which of the following is true?
Everything else constant, the maximum expected loss ratio that would yield a profitable line after including investment income is $7,500.
Everything else constant, the maximum expected loss ratio that would yield a profitable line after including investment income is $26,750.
Everything else constant, the maximum expected loss ratio that would yield a profitable line after including investment income is $17,500.
Everything else constant, the maximum expected loss ratio that would yield a profitable line after including investment income is $18,350.
Everything else constant, the maximum expected loss ratio that would yield a profitable line after including investment income is $16,250.
(please show step by step)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started