Stats RM_Test: | 2 057072 5. Marvin has a rental property at Martha's Vineyard that is valued at $500,000. Felicia has an identical property across the street from Marvin. There is a hurricane coming through the Northeast this weekend that will destroy their properties if it hits the island directly, but there's only a 20% chance of that happening. If Marvin makes no deals, what is the expected value of his property? 6. Insuring homeowners solely in one major geographic area is not a good idea, as it fails to ensure which of the following characteristics of ideally insurable risks: a. There must be a large number of exposure units. b. The loss must be accidental and unintentional. c. The loss should be determinable and measurable. d. The loss should not be catastrophic. 7. Insurance works because of the principle, by which the losses of a few policyholders are spread over the entire group. 8. A person who is 99-years old would generally have trouble getting a life insurance policy, as his insurer would have to be compensated for the high likelihood of imminent death. This illustrates which fact about insurable risks? a. The chance of loss needs to be relatively low, or premiums will not be affordable. b. The number of exposure units must be high. c. The chance of loss must be calculable. d. The loss must be unintentional