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Several models in macroeconomics are being applied in daily activities and prosperity in economic perspective. On 1 January 2014 an insurance company writes a policy

Several models in macroeconomics are being applied in daily activities and prosperity in economic perspective.

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On 1 January 2014 an insurance company writes a policy for a European farmer. At the end of each year, the farmer's crop is assessed, and if it is less than 100 tonnes, it is deemed to have failed. If the crop fails for two years in a row the insurance policy pays out Elm and then is immediately terminated. Premiums are E25k per month, paid in advance, and there are no expenses. This is the only policy the insurance company writes and it has initial surplus U> 0. Denote by "I(Un the probability of ruin by time , measured in years; and '(U) as the ultimate probability of ruin. Explain whether the following statements are TRUE or FALSE: (a) (c) YU,3 )

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