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
Burka [1]
3 years ago
12

You are considering buying one of two types of health insurance, both with the same premium. You guess that in the next year the

re is a 1 percent chance of serious illness that will cost you $67,500 in health care, a 9 percent chance of a moderate illness that will cost you $2,500, and a 90 percent chance of regular health care needs that will cost you $500. One type of health insurance is emergency-only coverage; it will cover your expenses for serious illness but not moderate illness or regular care. The other type covers moderate illness and regular expenses, but its payout is capped, so it will not cover the cost of a serious illness.
Required:
a. What is the expected value of payouts from the emergency-only insurance? $.
b. What is the expected value of payouts from the capped-coverage insurance? $.
c. Which is the more risk-averse option?
Business
1 answer:
dybincka [34]3 years ago
8 0

Answer and Explanation:

The computation is shown below:

a. The expected value of payout arise from emergency is

= 0.01 × $67,500

= $675

b. The expected value of payout arise from capped coverage insuance is

= (0.9 × $500) + (0.09 × $2,500)

= $675

c. The risk averse shows the minimum exposure with respect to the swings of the income or there would be the loss in the income. Since the payout amount is same in both the cases so here we considered option B

You might be interested in
If a firm produces 10 units of output, total costs are $1,030, and average fixed costs are $10, then total variable costs are
skad [1K]

Answer:

Total variable costs =$930

Explanation:

Total cost is the sum of total fixed cost and total variable cost. Hence given the average fixed cost , we can work-out the total variable cost.

This  is done as follows:

Total fixed costs = average fixed costs × number of units

                         = $10 × 10= $100.

Total variable costs = Total cost - total fixed cost

                               = $1,030 - $100

                               =$930

Total variable costs =$930

3 0
3 years ago
Night talking time. Everyone allowed!
Rudiy27

Answer:

if u want talk to me here I am

8 0
2 years ago
Как защитить себя от воздействующих факторов взрыва, если вы находитесь в зоне действия продуктов взрыва?
Elenna [48]
What language is this in ⊅ω↑⊂∡⊂⊃∩∅⊃ÉçœÄÈΠЫднеО
5 0
3 years ago
What is a written plan of action, developed prior to executing a mission, which will improve your chances of successful evasion
olga nikolaevna [1]

Answer:

The correct answer is "Evasion plan of action"

Explanation:

The evasion plan of action (Epa) is used to predict the chances of succesful situations, actions and movements of the opposition. If you know it, you could generate an advantage.

5 0
3 years ago
Read 2 more answers
How does financial manager involes operating decision<br>​
daser333 [38]

Answer:

they use financial statements and other information prepared by accountants to make financial decision and are focused on the cash flows, the inflows and outflows of cash.

Explanation:

7 0
3 years ago
Other questions:
  • Kendra is concerned about the wavy red lines she sees under some words in
    8·2 answers
  • The national? freshman-to-sophomore retention rate has held steady at? 74%. a certain college has 477477 of the 587587 freshman
    8·1 answer
  • Leah and santana have been requested to print a daily report of scheduled activities. their supervisor needs to know if each par
    13·1 answer
  • The following section is taken from Ivanhoe's balance sheet at December 31, 2021. Current liabilities Interest payable $ 47,500
    15·1 answer
  • Discuss how a minor change in demand at the retail level can significantly impact supply chain variation at distributors, manufa
    14·1 answer
  • In accounting, emphasis is placed on determining net income in accordance with generally accepted accounting principles. In fina
    12·1 answer
  • What is a potential disadvantage of direct selling? A. Consumers must go out of their way. B. Some customers view direct selling
    12·1 answer
  • Washington state had a bumper apple crop this year, significantly increasing the supply of apples in the U.S. Given this informa
    13·1 answer
  • The top management of a beverage manufacturing company has put together a team to handle the marketing of its new health drink.
    8·1 answer
  • Three individuals in a partnership agree to divide the profit equally. X invests $4500, Y invests $3500, and Z invests $2000. Th
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!