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Verdich [7]
3 years ago
10

Kramerica Company has a small plant worth $60,000. The plant is subject to physical damages and total destruction as a result of

re. From over 10,000 industry observations, the rm has derived the following probability distribution of re losses for its physical plant.
1
Loss Amount ($) Probability of Loss
0 .5
20,000 .2
30,000 .2
60,000 ?

Kramerica is considering the following risk management options:

Retention
Partial Insurance - Coverage Limit = $30,000; Premium = $10,000
Deductible insurance - Deductible per occurrence = $20,000; Premium = $15,000
Full insurance - Premium = $24,000

Answer the following questions:

(a) Construct the loss matrix. (2 pts)

(b) Assume that the rm decides to choose a risk management alternative without including valuation for subjective risk. What risk management option is chosen? Show all work and calculations for each option. (3 pts)

(c) What worry value(s) would make full insurance preferred to partial insurance? Show all work and calculations and explain your numerical answer. (1 pt)

(d) What worry value(s) would make deductible insurance preferred to partial insurance? Show all work and calculations and explain your numerical answer. (1 pt)

(e) What is the AFP for each insurance option? (3 pts)
Mathematics
1 answer:
Elan Coil [88]3 years ago
5 0

Ans

Step-by-step explanation

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Answer:

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Look at the step-by-step explanation if you get confused at the bottom.


Step-by-step explanation:

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Max makes and sells posters. The function p(x)= -10x^2 +200x -250, graphed below, indicates how much profit he makes in a month
viktelen [127]
Here is our profit as a function of # of posters
p(x) =-10x² + 200x - 250
Here is our price per poster, as a function of the # of posters:
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Since we want to find the optimum price and # of posters, let's plug our price function into our profit function, to find the optimum x, and then use that to find the optimum price:
p(x) = -10 (20-x)² + 200 (20 - x) - 250
p(x) = -10 (400 -40x + x²) + 4000 - 200x - 250
Take a look at our profit function. It is a normal trinomial square, with a negative sign on the squared term. This means the curve is a downward facing parabola, so our profit maximum will be the top of the curve.
By taking the derivative, we can find where p'(x) = 0 (where the slope of p(x) equals 0), to see where the top of profit function is.
p(x) = -4000 +400x -10x² + 4000 -200x -250
p'(x) = 400 - 20x -200
0 = 200 - 20x
20x = 200
x = 10                         
p'(x) = 0 at x=10. This is the peak of our profit function. To find the price per poster, plug x=10 into our price function:
price = 20 - x
price = 10
Now plug x=10 into our original profit function in order to find our maximum profit:
<span>p(x)= -10x^2 +200x -250
p(x) = -10 (10)</span>² +200 (10) - 250
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p(x) = 750

Correct answer is C)
</span>
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Arun bought a pair of skates at a sale where the discount given was 20%. If the amount he pays is Dhs.4000, find the marked pric
vekshin1
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The admission fee at a carnival is $5 for children and $8 for adults on Friday, 1250 people attended the carnival and $7300 was
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Answer:

-> a + c = 1250 ____________ (1)

-> 8a + 5c = 7300 __________(2)

There were 900 children and 350 adults.

Step-by-step explanation:

Let the number of children at the carnival be c.

Let the number of adults at the carnival be a.

The admission fee at a carnival is $5 for children and $8 for adults on Friday.

1250 people attended the carnival and $7300 was collected. This means two things:

-> a + c = 1250 ____________ (1)

-> 8a + 5c = 7300 __________(2)

We now have a system of equations representing the problem.

To solve, make a subject of formula in (1):

a = 1250 - c _______(3)

Put (3) in (2):

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Put the value of c back in (3):

a = 1250 - 900 = 350

Therefore, there were 900 children and 350 adults at the carnival.

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