Business, 15.04.2020 02:32 williamnason123
Suppose that every driver faces a 2% probability of an automobile accident every year. An accident will, on average, cost each driver $12,000. Suppose there are two types of individuals: those with $72,000.00 in the bank and those with $2,400.00 in the bank. Assume that individuals with $2,400.00 in the bank declare bankruptcy if they get in an accident. In bankruptcy, creditors receive only what individuals have in the bank. Assume that both types of individuals are only slightly risk averse. In this scenario, the actuarially fair price of full insurance, in which all damages are paid by the insurance company, is $ . Assume that the price of insurance is set at the actuarially fair price. At this price, drivers with $2,400.00 in the bank likely buy insurance, and those with $72,000.00 in the bank likely buy insurance. (Hint: For each type of driver, compare the price of insurance to the expected cost without insurance.) Suppose a state law has been passed forcing all individuals to purchase insurance at the actuarially fair price. True or False: The law will affect only the behavior of drivers with $2,400.00 in the bank.
Answers: 3
Business, 21.06.2019 20:20
Avx home entertainment, inc., recently began a “no-hassles” return policy. a sample of 500 customers who recently returned items showed 400 thought the policy was fair, 32 thought it took too long to complete the transaction, and the rest had no opinion. on the basis of this information, make an inference about customer reaction to the new policy. (round your answers to 1 decimal place.)
Answers: 3
Business, 22.06.2019 01:00
Azster inc. recorded sales revenue for the year that ended december 31, 2014 as $67,000. interest revenue of $5,300 and expenses of $14,000 were also recorded for the same period. what is aster’s net profit or loss?
Answers: 3
Business, 22.06.2019 08:00
How do communism and socialism differ in terms of the role that government plays in the economy ?
Answers: 1
Business, 22.06.2019 11:00
When using various forms of promotion to carry the promotion message, it is important that the recipients of the message interpret it in the same way. creating a unified promotional message, where potential customers perceive the same message, whether it is in a tv commercial, or on a billboard, or in a blog, is called
Answers: 2
Suppose that every driver faces a 2% probability of an automobile accident every year. An accident w...
Mathematics, 14.11.2020 01:00
Mathematics, 14.11.2020 01:00
English, 14.11.2020 01:00
English, 14.11.2020 01:00
Mathematics, 14.11.2020 01:00
Chemistry, 14.11.2020 01:00
Mathematics, 14.11.2020 01:00
Mathematics, 14.11.2020 01:00
Mathematics, 14.11.2020 01:00
Mathematics, 14.11.2020 01:00
Mathematics, 14.11.2020 01:00