Question: a.What premium amount must Wile E. and Rhoda each individually pay if Acme Insurance wants to break-even? i.0 x 0.9603 + $200,000 x 0.0297 +

a.What premium amount must Wile E. and Rhoda each individually pay if Acme Insurance wants to "break-even"?

i.0 x 0.9603 + $200,000 x 0.0297 + $200,000 x 0.0097 + $400,000 x 0.0003 = 8,000

ii.$8,000 will be the premium amount they both will pay if Acme insurance wants to "break-even."

b.Will Wile E. purchase this contract if he is charged the "break-even" premium? Will Rhoda purchase this contract if she is charged the "break-even" premium? Briefly explain your reason.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Mathematics Questions!

Purchase Corporation purchased 60 percent of Steal Company ownership on January 1, 20X7, for $277,500. Steal reported the following net income and dividend payments: Year Net Income Dividends Paid...

ONLY NEED HELP WITH SOLUTIONS TO NUMBERS 2 AND 3 ALL LETTERS. Please show all calculations. 1. Rhoda Ruyner owns a $200,000 home and has a 2% chance of experiencing a loss that destroys her home in...

hance of experiencing a loss that destroys her home in any given year. 1. Assume that only one loss per year can occur and that if a loss occurs, Rhoda's home is totally destroyed. Suppose that Rhoda...

Use this information to answer questions 1, 2 and 3: Rhoda Ronner owns a $500,000 home and has a 1% chance of experiencing a loss that destroys her home in any given year. 1. Assume that only one...

i need help with with the applied math questions as I'm not too sure how to do these or even if these are statistics questions or what. 1. Rhoda Ruyner owns a $200,000 home and has a 2%% chance of...

Rhoda Ruyner owns a $200,000 home and has a 2% chance of experiencing a loss that destroys her home in any given year. Assume that only one loss per year can occur and that if a loss occurs, her home...

A) Rhoda Ronner owns a $500,000 home and has a 1% chance of experiencing a loss that destroys her home in any given year. Assume that only one loss per year can occur and that if a loss occurs,...

Please help me with this question I am having a hard time figuring it out 1. Rhoda Burner owns a Saad, dad home and has a 2{ chance of experiencing a loss that destroys her home in any given year ....

1) Rhoda Ronner owns a $500,000 home and has a 1% chance of experiencing a loss that destroys her home in any given year. Assume that only one loss per year can occur and that if a loss occurs,...

Risk management course question. 1. Rhoda Ruyner owns a $200,000 home and has a 3% chance of experiencing a loss that destroys her home in any given year. Assume that only one loss per year can occur...

1. Rhoda Ruyner owns a $200,000 home and has a 2 % chance of experiencing a loss that destroys her home in any given year. Assume that only one loss per year can occur and tha t if a loss occurs, her...

Determine Ix in the circuit shown in Fig. 3.50 using nodal analysis. Figure 3.50 For Prob. 3.1 4 k AM 9v+

If p(a) = 0.2, p(b/a) = 0.3, and p(b/ac)=0.4, what is the theoretical probability of a given b? a. 0.16 b. 0.19 c. 0.20 d. 0.43

As the world continues to change, will human resource management maintain a stable role in business strategy or will it blend into organizational behavor management?

Fifteen years ago the Acme Manufacturing Company bought a propane-powered forklift truck for $4800. The company depreciated the forklift using straight line depreciation , a 12-year life, and zero...

Thin film coatings characterized by high resistance to abrasion and fracture may be formed by using micro-scale composite particles in a plasma spraying process. A spherical particle typically...

(a) What is a statement of cash flows? (b) John Norris maintains that the statement of cash flows is an optional financial statement. Do you agree? Explain.

Distinguish among the three types of activities reported in the statement of cash flows.

Why is it important to disclose certain noncash transactions? How should they be disclosed?

Green Vehicle Inc., manufactures electric cars and small delivery trucks. It has just opened a new factory where the C1 car and the T1 truck can both be manufactured. To make either vehicle,...

7. Think of a situation where you felt that you mastered the situation, i.e. where you had a positive feeling of completing the task you were to perform. A. Now develop a picture in your imaginary...

6. Think of something that you believe in, without the slightest doubt attached to it. How do you imagine this? Is it verbal, in rumours, in metaphors or the like? The answer says something about how...

Do not move closer than an arms distance. (This distance literally applies to Northern Europe. In Southern Europe this distance is slightly smaller.) If you get closer than this distance, you seem...