<span>what is the price-earnings ratio</span> is 17.1
Answer:
A) The amount of the premium in fair insurance policy that replaces Beths car, must be equal to the probability or expectation of claim of car theft.
Therefore, the Premium amount = 20000 x (1/200)
= 20000 (0.005)
= $100
B) If an Insurance company charges 0.6% for replacing a stolen car, then the policy will cost beth:
20000* 0.6%
= 12,000/100
= $ 120
C) To be risk-neutral means to be indifferent to the risk. This means that Beth would be indifferent. She most likely will be focused on maximizing value for money. In other words, she will NOT pay for the insurance policy in part b because part A provides her with the exact (or fair) premium for her insurance.
D) The moral hazard problem is this, people tend to become more careless with an insurance policy in place. This moral hazard arises form the knowledge that there is an insurance policy that caters to their risks.
As a matter of practice, therefore, insurance companies factor this increased risk into their premiums. Where the premium was supposed to be $100, they may charge $120.
In summary, it means that Beth most likely will move from becoming risk neutral to becoming (to a certain degree) more risk loving.
Cheers!
Answer:
Explanation:
<u>Linear Modeling</u>
Models are an important part of the study of a variety of natural phenomena in a great number of fields like science, health, business, human behavior, economics, among many others.
Once a model is determined, it can be used to estimate future values of important variables which in turn can help people to make decisions.
It has been determined a model that relates the amount of term life insurance a family of four should have with the current age of the head of the household. That model is
we are required to estimate the amount of term life insurance to recommend to a family of four when the head of the household is x=41 years old. Let's plug in the given value in the equation
Answer:
The correct answer is negotiation.
Explanation:
A definition of negotiation that appears on the internet expresses, which is the communication process that aims to influence the behavior of others and where both parties reach a WIN-WIN agreement. The reason why at the end of a negotiation both parties can believe that they have won is that neither the interests nor the values have to be opposed, and it is the responsibility of the negotiators to discover the complementary points to develop a negotiation with the win-win scheme.
On the other hand, negotiation techniques are defined as the mechanisms and models of behavior that the parties use to influence the other and achieve a satisfactory solution to a conflictive encounter. These actions are based on the potential power of the parties involved in the negotiation.
Answer:
C) i and ii
Explanation:
Price elastic of demand (PED) of kerosene = 2.2% / 10% = 0.22 price inelastic demand
When two products are substitutes, an increase in the price of one of the products will not only reduce the quantity demanded of that product, but it will also increase the quantity demanded of its substitute products. In this case, an increase in the price of electricity, increases the quantity demanded for kerosene, which means that they are both substitute products.
