Walter White works for Dodgy insurance company. Walter is given the task of predicting how many...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Walter White works for Dodgy insurance company. Walter is given the task of predicting how many houses in a rural suburb in Victoria will be destroyed by a fire in the next 12 months out of a sample of 3000 randomly chosen houses and assessing the degree of loss related to insuring these houses. Part A Identify two factors that would increase the degree of risk and two factors that would decrease the degree of risk in the above scenario. (5 marks) Part B Based on Walter's evaluation, assume that the insurance company has decided to accept the above risk. Should the insurance company insure more houses in the area? Why or why not? (5 marks) Walter White works for Dodgy insurance company. Walter is given the task of predicting how many houses in a rural suburb in Victoria will be destroyed by a fire in the next 12 months out of a sample of 3000 randomly chosen houses and assessing the degree of loss related to insuring these houses. Part A Identify two factors that would increase the degree of risk and two factors that would decrease the degree of risk in the above scenario. (5 marks) Part B Based on Walter's evaluation, assume that the insurance company has decided to accept the above risk. Should the insurance company insure more houses in the area? Why or why not? (5 marks)
Expert Answer:
Answer rating: 100% (QA)
Part A Two factors that would increase the degree of risk in the above scenario are Dry and hot weat... View the full answer
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
Posted Date:
Students also viewed these finance questions
-
This case was written by Professor Michele Greenwald, Visiting Professor of Marketing at HEC Paris, for use with Advertising and Promotion: An Integrated Marketing Communications Perspective 7th...
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Manual programming for the following picture : 3.000 2.250 1.500 .750 PART#:00002 ZEE & SLOTS (MANUAL PROGRAMMING) 5.0 REF. .500 5 1.375 3.000 2.250 TITLE: PART#: 00002 (ZEE & SLOTS) DRAWN BY:...
-
Determine the force P needed to hold the cable in the position shown, i.e., so segment BC remains horizontal. Also, compute the sag yB and the maximum tension in thecable. 3 m 6 kN 4 kN +3m-2 m -6 m...
-
How much will Larissa have in her savings account 10 years from now, if she deposits the $5817 that her grandfather gave her at 5% interest rate, compounded annually? Round your answer to 2 decimal...
-
Why is it difficult to implement enterprise systems?
-
If you borrow $5,300 at $400 interest for one year, what is your effective interest rate for the following payment plans? a. Annual payment. b. Semiannual payments. c. Quarterly payments. d. Monthly...
-
Steinberg Company had the following direct materials costs for the manufacturing of product T in March: Actual purchase price per pound of direct materials Standard direct materials allowed for units...
-
D. Deni commenced business on 1 April 2014 by depositing Sh.8 million into the business bank account. All receipts and payments were channelled through this business account. During the year ended 31...
-
Might we be able to predict life expectancies from birthrates? Below are bivariate data giving birthrate and life expectancy information for each of twelve countries. For each of the countries, both...
-
In what way(s) can an illegitimate child be legitimated in your state?
-
Find authority (e.g., a statute or a court opinion) in your state for the courts power to modify an alimony award. When will such a modification be made?
-
Under what circumstances will an unmarried man be given notice of an adoption proceeding for his child in your state?
-
The property division clause in the premarital agreement of George and Jane provides that in the event of a divorce George will receive $750,000 and Jane will receive all other property acquired...
-
How does the State Parent Locator Service of the IV-D agency in your state operate? Describe how the service functions.
-
Calculate the yield to maturity (YTM) for a one-year coupon bond with a purchase price of $8,000, a face value of $10,000, and a current yield of 10%. The yield to maturity is%. (Round your response...
-
If M = 7, s = 2, and X = 9.5, what is z?
-
Interpret the following information regarding Bates Corporations free cash flows and financing cash flows. Maness Corporation Free Cash Flows and Financing Cash Flows FREE CASH FLOWS Operating income...
-
The preferred stock of Armlo pays a $ 2.75 dividend. What is the value of the stock if your required return is 9 percent?
-
The annual sales for Salco Inc. were $ 4.5 million last year. All sales are on credit. The firms end- of- year balance sheet was as follows: The firms income statement for the year was as follows:...
-
Prove that the sine Fourier components \(\left(b_{n} ight)\) are zero for even functions-that is, when \(x(-t)=x(t)\). Also prove that the cosine Fourier components \(\left(a_{0} ight.\) and...
-
Using the definition given in Problem 1.104, find the rms value of the function shown in Fig. 1.54(a). Data From Problem 1.104:- The root mean square (rms) value of a function, \(x(t)\), is defined...
-
The impact force created by a forging hammer can be modeled as shown in Fig. 1.114. Determine the Fourier series expansion of the impact force. x(1) T 2T FIGURE 1.114 Impact force created by a...
Study smarter with the SolutionInn App