24. What is the average loss severity over the three years?

a. $8,137

b. $10,643

c. $11,300

d. $11,751

25. Using the three-year average frequency and average severity, what is the expected total loss amount for the next year (Year 4)?

a. $65,891

b. $74,501

c. $79,261

d. $81,951

28. In Year 3, Smith Corporation had an insurance policy to help finance its losses. The policy had a $5,000 per occurrence deductible, a $25,000 stop-loss provision, and a $75,000 policy limit. What amount did Smith Corporation pay for these losses?

a. $25,000

b. $35,000

c. $38,000

d. $42,000

29. Using the contract terms from Question #28, what amount did the insurer pay for these losses?

a. $88,000

b. $78,000

c. $75,000

d. $71,000

The following table contains loss data from Smith Corporation. Use this data to answer questions #23 - #29. #1 Year 1 Loss Severity #1 $4,000 #2 2,000 #3 8,000 #4 5,500 #5 19,000 #6 11,000 #7 4,500 Year 2 Loss Severity #1 $7,000 #2 27,000 #3 5,000 #4 14,000 #5 3,500 Year 3 Loss Severity $3,000 #2 9,500 #3 17,000 #4 12,000 #5 5,000 #6 31,000 #7 21,000 #8 6,000 #9 8,500 The following table contains loss data from Smith Corporation. Use this data to answer questions #23 - #29. #1 Year 1 Loss Severity #1 $4,000 #2 2,000 #3 8,000 #4 5,500 #5 19,000 #6 11,000 #7 4,500 Year 2 Loss Severity #1 $7,000 #2 27,000 #3 5,000 #4 14,000 #5 3,500 Year 3 Loss Severity $3,000 #2 9,500 #3 17,000 #4 12,000 #5 5,000 #6 31,000 #7 21,000 #8 6,000 #9 8,500