Question: This assignment has you calculate actuarially fair premiums for 10 individuals and the maximum premium they are willing to pay. Then, assuming that the insurance

This assignment has you calculate actuarially fair premiums for 10 individuals and the maximum premium they are willing to pay. Then, assuming that the insurance company can only charge an actuarially fair premium for the group of 10 as a whole, you must determine the premium and which of the 10 individuals would opt to not be insured.

Part 1: Fully informed insurance company

For each individual, calculate:

a. The actuarially fair premium.

This assignment has you calculate actuarially fair premiums for 10 individuals and

You have the following information on ten individuals, A-J: Cost of Individual Wealth Pr(Sick) being sick $210,000 0.25 $5,000 $160,000 0.25 $25,000 $90,000 0.20 $10,000 $120,000 0.05 $10,000 $230,000 0.05 $5,000 $250,000 0.05 $25,000 $50,000 0.25 $20,000 $200,000 0.20 $25,000 $100,000 0.10 $15,000 $190,000 0.05 $15,000

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