Answer:
Explanation:
The expected value is calculated by using the probability of each event. If the chance of dying is 0.60% then the chance living is 99.40%. The expect value formula is:
∑[(xi)*P(xi)] (for all i events).
In this problem we have two events: live or die. If the person dies the family receives $1,000,000 (X1=$1,000,000) and if the person lives the family receives $0 (X2=$0). The probability of receiving $1,000,000 is 60% (P(x1)=0.006) and the probability of receiving $0 is 99.40% (P(x2)=0.994)
Using the formula the expected value of the policy (without the insurance cost):
$1,000,000* (0.006)+ $0*(0,994)= $6,000
If we subtract the insurance value:
$6,000-$5,500= $500
I guess the correct answer is $83,386.89.
If you inherited $870,000 and invested it at 8.25% per year, the value you could withdraw at the beginning of each of the next 20 years is $83,386.89.
Answer:
The correct answer is 3.859 %
Explanation:
Year 2015 = 207.3
Year 2016 = 215.3
Year 2016 (215.3) - Year 2015 (207.3) = 8
Rule of three
207.3 ------- 100%
8 ---------- ?
(8 x 100) ÷ 207.3 = 3.859%
Answer:
The answer may be a, as Starbucks has been copied many times over.
Answer: See explanation
Explanation:
Your question is not complete. Here is the completed question:
The Treasury bill rate is 6%, and the expected return on the market portfolio is 10%. According to the capital asset pricing model, what is the risk premium?
The risk premium will be the difference between the market portfolio and the treasury bill rate. This will be:
= 10% - 6%
= 4%
