National Property Casualty has $9,500,000 in premiums on its auto insurance line. The lines losses amount to
Question:
National Property Casualty has $9,500,000 in premiums on its auto insurance line. The line’s losses amount to $6,245,900, expenses are $2,906,430, and dividends are $189,650. The insurer earns $397,110 in the investment of its premiums. Calculate the auto insurance line’s loss ratio, expense ratio, dividend ratio, combined ratio, investment ratio, operating ratio, and overall profitability. Goode Investment Bank agrees to underwrite 1,000,000.
CFS Company’s shares on a best efforts basis. It then sells 800,000 shares to the public for $20 each.
The agreement is that Goode will charge 1.50 per share sold.
a. How much money does CFS receive?
b. How much money does CFS pay?
c. What Is Goode’s profit? d. What is the stock price of CFS? Complete your 2-4 page response using Microsoft Word and/or Excel, but be sure to submit only one document for grading. For calculations, you must show work.
Principles of Risk Management and Insurance
ISBN: 978-0132992916
12th edition
Authors: George E. Rejda, Michael McNamara