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2 years ago

What role does math play in the insurance industry?

Business

1 answer:

Nataly_w [17]2 years ago

3 0

Answer:

The correct answer based on the options given is A)

Explanation:

Actuarial Science is a branch of mathematics predominantly used by the Insurance Industry to create a formula or mathematical model that enables them to charge a profit-oriented rate for a particular risk.

If insurance companies charge arbitrarily, they may overcharge thus leading to a collapse of the system. If they undercharge, the system of pooling risks becomes unsustainable as claim paying capabilities are reduced.

Hence the need to use a mathematical model to ensure that rates give room for the ability of the system to meets it's obligations when they arise and for the companies to make a profit.

The use of models is the reason why sometimes there are hard markets in insurance and at other times there are soft markets.

Cheers!

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pishuonlain [190]

Answer:

The correct answer is the option 3: if the price of corn rises because of increased demand for corn, land rents will rise to absorb most of the extra revenue received by tenant corn farmers.

Explanation:

To begin with, in David Ricardo's statment it is established that ''the rent is paid because the price of the corn is high'' therefore it is understandable that it is stated that the price of the corn is not a cause of the rent but it is the opposite, the price causes the rent due to the fact that the rent is not a cost that has to go within the price but the price goes first and then the rent happens. Therefore that if there it an increase in the population and that causes and increase in the demand of the corn, then the price will rise and consequently the rent will rise to in order to obtain the most of the extra revenue that it can.

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3 years ago

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yanalaym [24]

Answer:

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2 years ago

1. Assume that the money demand function is (M / P)d = 2,200 – 200r, where r is the interest rate in percent. The money supply M

Wittaler [7]

Answer:

r= 3

Explanation:

Due that the level price does not changed, the first thing that you have to do to find the equilibrium is put the two equations with an equal

Money demand =Supply of money

2,200 – 200 r= 2,000

Now you have to find the value of r and you have to clear the formula and first you have to:

2,800- 2,200 = 200r

Now that you have the number together you have to apply the operation

600 = 200r

As the 200 is multiplying the r you have to pass the 200 to divided the 600

r= (600/200)

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The interest rate is 3%

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2 years ago

What is the maximum amount you will have to pay out of pocket for a car accident before your insurance covers your costs

Serga [27]

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2 years ago

Kempton Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 10% annual cou

viva [34]

Answer:

YTM is 7.46%

Explanation:

Given:

Face value of bond (FV) = $1,000

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Coupon rate = 10%

Coupon payment (pmt) = $100 (0.1×1,000)

Price of bond (PV) = $1,175

If the bonds are held till maturity, then yield to maturity is calculated using excel function =Rate(nper,pmt,PV,FV)

Yield of bond if held till maturity is 7.46%

4 0

3 years ago