Please solve by hand and not on the computer. Thanks

2. In espected loss is the actuarially fair insurance premium. Suppose your company wants to insure a building relevant discount rate is 4 percent. worth $245 million. The probability of loss is 1.25 percent in one year, and the a. What is the actuarially fair insurance premium? b. Suppose that you can make modifications to the building that wilreduce the probability of a loss to 90 percent. How much would you be willing to pay for these modifications? 3. ABC Company and XxZ Company need to raise funds to pay for capital imp rating in the debt market; it can history. It can borrow funds either at a 10 percent fixed rate or at LIBOR+3 percent floating rate. at their manufacturing plants ABC Company is a well-established firm with an excellent credit funds either at an 11 percent fwed rate or at LIBOR+1 percent floating rate. XVZ Company is a fledgling start-up firm without a strong credit a. Is there an opportunity here for ABC and XYZ to benefit by means of an interest rate swap? Suppose you've just been hired at a bank that acts as a dealer in the swaps market, and your boss has shown you the borrowing rate information for your clients ABC and XYZ Describe how you could bring these two companies together in an interest rate swap that would make both firms better off while netting your bank a 2.0 percent pro 4. Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $85 20 1600 6.00 2.80 127 140