Q2. q = $1,000 I H = $5,000 I S ' = $150 How do you describe
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Q2. q = $1,000 IH = $5,000 IS' = $150
How do you describe this insurance policy? A. full and fair insurance. B full and unfair insurance C partial and fair insurance D Not enough info. E partial insurance
Q3 Given partial insurance, A . IH' = IS' B. IH' >IS C IH >IS' D. triangle below the zero profit and full insurance intersection E. IH' >IS'
Q13 13. In addition to info in Question number 2,
assume r = $900 and p = 0.1 or 10%
What is the value of IS ? What is the expected profit of the insurance company?
| $250; $800 | |
| $50; $1,000 |
| $50; $900 | |
| $50; $800 |
| none of the above |
14. How do you describe the insurance policy based on info from numbers 2 and 13?
| full and fair | |
| full and unfair |
| partial and fair | |
| partial and unfair |
Expert Answer:
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