Question
You own a house along a river that floods severely and destroys the house once every 20 years. If your house is worth $210k,
You own a house along a river that floods severely and destroys the house once every 20 years. If your house is worth $210k, what would be your annual insurance premium in dollars? You also have the option to build a seawall to lower the odds of your house being destroyed by a flood. If the seawall makes the likelihood of the destructive flood become once every 80 years, what should be your insurance premium?
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Financial Markets And Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
7th Edition
013213683X, 978-0132136839
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