1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
suter [353]
3 years ago
11

A private pilot wishes to insure his airplane for$200,000. The insurance company estimates that a total loss will occur with pro

bability 0.002, a 50% losswith probability 0.01, and a 25% loss with probability 0.1. Ignoring all other partial losses, what premium should the insurance company charge each year to realize an average profit of $500?
Business
1 answer:
Finger [1]3 years ago
4 0

Answer:

The answer is: $6,900

Explanation:

To determine how much the insurance company should charge, we must first calculate the amount of money they expect to pay:

  • total loss $200,000 x 0.002 = $400
  • 50% loss $100,000 x 0.01     = $1,000
  • 25% loss $50,000 x 0.1         = $5,000

                                                 Total  $6,400

If the insurance company expects to pay $6,400 per year, they will have to charge $6,900 ($6,400 + $500) to cover their expenses and earn a $500 profit.

You might be interested in
Gross Domestic Product (GDP) includes _____ goods and services.
Elena L [17]
Last year's goods and services.

3 0
3 years ago
Read 2 more answers
An asset has had an arithmetic return of 10.3 percent and a geometric return of 8.3 percent over the last 90 years. What return
Art [367]

Answer:

Blume's formula combines the geometric and arithmetic means of an asset to be able to predict its returns in a given period.

The formula is;

<em>= Geometric Mean*(T-1)/(N-1) + Arithmatic Mean *(N-T)/(N-1) </em>

Where;

T = Period in question

N = Total period

10 years

= 8.3%*(10-1)/(90-1) + 10.3%*(90-10)/(90-1)

= 10.1 %

25 years

= 8.3%*(25-1)/(90-1) + 10.3%*(90-25)/(90-1)

= 9.76%

30 years

= 8.3%*(30-1)/(90-1) + 10.3%*(90-30)/(90-1)

= 9.65%

4 0
3 years ago
Silicon Valley in California is the world center for the computer and semiconductor industry and has many of the world's major c
laila [671]

Answer:

The correct answer is D. externalities.

Explanation:

An externality is defined as that situation or group of situations that determine that a service good is not reflected at its real market price. In this example, the computer industry is so close that they do not know for sure the benefits they have when offering their goods, and it becomes an advantage in the sense that due to its close location it is possible to establish agreements to manage prices and not enter into direct market competition.

7 0
3 years ago
1.You should document your sources in all of the following situations except A. when using someone else's unique idea. B. when u
jeka94

2. A. Feasibility report

7 0
3 years ago
As president of​ Econivalia, you are constantly strained for funds to pay your troops. Your chief economist suggests the followi
barxatty [35]

Answer: All of the above are problem with the plan.

Explanation:

If a Government rapidly increases the money supplied into an economy, it leads to inflation.

This is because as the citizens of a country get more money at a very short interval, they would tend to demand for more items in the market, the increase in demand would directly lead to an increase in price which is an inflation.

Therefore minting extra money may pay the soldiers but negatively affect the economy as price of commodities would increase.

5 0
4 years ago
Other questions:
  • Clyde is a cash-method taxpayer who reports on a calendar-year basis. This year Paylate Corporation has decided to pay Clyde a y
    7·1 answer
  • Strolovitch has found that african american organizations are likely to
    12·2 answers
  • This problem has been solved!
    8·1 answer
  • Question 5 (60 points)
    14·1 answer
  • Esteem needs are the highest level in Maslow's hierarchy of needs. True False
    12·1 answer
  • ________ products are less frequently purchased consumer products and services that customers compare carefully on suitability,
    11·1 answer
  • According to Karl Marx, capitalists really produced all wealth, and the laborers were the recipients of the wealth.
    7·1 answer
  • Which options are SmartArt categories? Check all that apply.
    8·1 answer
  • On July 1, 2021, Clearwater Inc. purchased 9,300 shares of the outstanding common stock of Mountain Corporation at a cost of $21
    10·1 answer
  • On August 22, Year 4, Martha purchases a computer to use in her childcare business. She sells the computer on December 28, Year
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!