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Monica [59]
3 years ago
10

Explain how insurance companies use risk pooling to generate a profit for their

Business
1 answer:
gavmur [86]3 years ago
6 0

Answer: By creating risk pools, insurance companies help spread the risk and avoid the type of massive payout required after a catastrophic loss. It is a form of risk management for insurance companies. If a claim is made for reimbursement due to that catastrophic loss, the participating insurance companies spread the loss among themselves.

Explanation:

You might be interested in
Interest rates on 4-year Treasury securities are currently 5.4%, while 6-year Treasury securities yield 7.65%. If the pure expec
Fudgin [204]

Answer:

12.3%

Explanation:

In this question, we are asked to calculate what is believed a 2-year market security will be yielding, 4 years from now

To calculate this, we proceed mathematically;

2 year yield 4 years from now = [ ( 1 + 0.0765)^6 / ( 1 + 0.054)^4]^1/2 - 1

2 year yield 4 years from now = [ 1.5563 / 1.2341]^1/2 - 1 = 0.123

2 year yield 4 years from now = 0.123

2 year yield 4 years from now = 12.3%

8 0
3 years ago
Mia received a credit card offer in the mail. The credit card has an annual percentage rate of 26%. What is the approximate mont
devlian [24]

Answer:

Monthly interest rate = 2.16666667%

Explanation:

Given:

Annual percentage rate = 26% = 26 / 100 = 0.26

Total number of months in a year = 12 month

Monthly interest rate = ?

Computation of monthly interest rate :

Monthly interest rate = Annual percentage rate / Total number of months in a year

Monthly interest rate = 0.26 / 12

Monthly interest rate = 0.0216666667

Monthly interest rate = 2.16666667%

6 0
4 years ago
A pension fund has an average duration of its liabilities equal to 15 years. The fund is looking at 5-year maturity zero-coupon
gayaneshka [121]

Answer:

The 52 of its portfolio should be allocated to the zero-coupon bonds to immunie if there are no other assets funding the plan.

Explanation:

the duration of the perpetuity = (1+YTM)/YTM

                                                  = (1+0.04)/0.04

                                                  = 26 years

the weights of the bonds = w

5*w + 26*(1-w) = 15

5*w + 26 - 26*w = 15

21*w =  11

w = 0.52

Therefore, The 52 of its portfolio should be allocated to the zero-coupon bonds to immunie if there are no other assets funding the plan.

7 0
3 years ago
In an emergency situation, such as a life-threatening trauma in an emergency room, a supervisor must be:_______.
weqwewe [10]

Answer:

d. direct and assertive.

Explanation:

In an emergency situation, such as a life-threatening trauma in an emergency room, a supervisor must be direct and assertive.

When there's an emergency situation, this ultimately implies a life and death situation which is typically characterized by having someone being in a very critical and dangerous condition. In order to be able to save such an individual or situations, it is very important and essential to have a direct and assertive supervisor who is in charge or control of the emergency situation and capable of making quick decisions that would most likely salvage the situation.

A supervisor who is assertive is confident, bold and positive about his or her instructions in any situation, which is a prerequisite quality to overcome emergencies.

8 0
3 years ago
Dr. Beswick was writing questions for a test, but found herself listening to reggae music coming from an adjoining office, and t
Svetradugi [14.3K]

Dr. Beswick was writing questions for a test, but found herself listening to reggae music coming from an adjoining office, and thinking about her upcoming trip to the Caribbean. She is experiencing  <u>attentional deficit</u>.

<u>Explanation</u>:

Attention deficit disorder (ADD) is a kind of neurological disorder that causes difficulty in concentration, lacking attention and facing many problems in completing tasks and social interaction.

Brain injury, genes and exposure to environment toxins are some of the causes of the attention deficit disorder.

In the above scenario, Dr. Beswick was attending a test. She was distracted by the reggae music that was coming from the adjoining office. After listening to the music she started thinking about her upcoming trip to Caribbean. Dr. Beswick was affected by attentional deficit disorder.

7 0
3 years ago
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