The answer is letter choice B
Answer:
Step-by-step explanation:
a) Because you are only receiving $1500 and in exchange you would have to cover for this accident damage in the next year, which could be up to hundred of thousands of dollar. Sure there's a chance the your neighbor might drive safely, but the odds are far more in his favor than yours.
b) The insurance company collect payments from hundred of thousands buyers, making their cash flow up to tens of million dollar. Sure the expected value of accidents might be high but as a company they surely have capital to cover a handful of cases, if their calculation done right.
(1+r)^5=137.76/100
1+r=(137.76/100)^(1/5)
R=(137.76/100)^(1/5))-1
Answer:
21:A 22:D
Step-by-step explanation:
hope that helps
