All categories

3 years ago

Insurance is _____________ when the possible loss is relatively large compared to the amount of the premium.

1 answer:

8 0

Using economic understanding, insurance is "Economically feasible" when the possible loss is relatively large compared to the premium amount.

This is because when an individual insured on a premium account loses huge properties that are considerably large compared to the premium paid, this is economically feasible to such an individual.

For example, if an individual has his vehicle worth $1 million on damaged but has only paid less than $100,000 as insurance fee, such individual would have his car replaced by the insurance firm, despite only paying 10 percent of the car price as insurance fee.

Thus, this situation is considered economically feasible.

Hence, in this case, it is concluded that the correct answer is "Economically feasible."

Learn more here: brainly.com/question/13769098

You might be interested in

Choose all that apply. Read the following paragraph. Select each of the ways Max was financially responsible. Max needed to make

mihalych1998 [28]

Would say that choices 1 and 2 would be the best answers!

4 0

3 years ago

Read 2 more answers

Cost of Debt KatyDid Clothes has a $150 million (face value) 30-year bond issue selling for 104 percent of par that carries a co

Ivahew [28]

Answer:

the annual pre-tax cost of debt is 10.56%

Explanation:

the beore-tax component cost of debt will be the actual market rate of the bonds, as they offer an interest rate of 11% but are selling at 104 points not at par thus, there is a difference between the rates.

We solve for the rate which makes the coupon and maturity 104

with excel or a financial calculator

PV of the coupon payment

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 5.500 (100 x 11%/2)

time 60 (30 years x 2 payment per year)

rate 0.052787474

$5.5 \times \frac{1-(1+0.0527874736258532)^{-60} }{0.0527874736258532} = PV\\$

PV $99.4338

PV of the maturity

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 100.00

time 60.00

rate 0.052787474

$\frac{100}{(1 + 0.0527874736258532)^{60} } = PV$

PV 4.57

Adding both we should get 104 which is the amount the bonds is selling:

PV coupon $99.4338 + PV maturity $4.5662 = $104.0000

The rate is generated using goal seek or wiht a financial calculator.

This rate is a semiannual rate, so we multiply by 2 to get the annual cost of debt:

0.052787474 x 2 = 0.105574947

The cost of debt for the firm is 10.56%

5 0

3 years ago

Which accurately explains the difference between the stock market and the currency exchange market?

jolli1 [7]

I would say that the stock market deals with selling and buying shares according to the confidence of the shareholders in say the price of metals and the quality of the companies' assets, whereas for currency exchange, it is based on the exchange rates between currencies and converting one to the other.

5 0

4 years ago

Read 2 more answers

Joe's company is looking to make a number of improvements. The firm would like to maximize potential volume and reserved instanc

scoray [572]

The service or tool that could be used for gaining the benefits should be AWS Orgs.

The information related to AWS Orgs is as follows:

AWS Organization should be an account management service.
In this, there are multiple AWS accounts that should be consolidated for developing and managing.
As an organization administrator, the accounts should be developed and the existing accounts should be invited for joining the organization.

Therefore we can conclude that the service or tool that could be used for gaining the benefits should be AWS Orgs.

Learn more about discounts here: brainly.com/question/3541148

3 0

3 years ago

Raul, an engineer with a leading manufacturer, pointed out a few things have contributed to his motivation. First, top managers

klemol [59]

Bsgshehsehe e e e s e w s s s s s s s s

3 0

3 years ago