Competitive insurance market

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1.If the probability of an injury is 0.07, the cost of the injury is $9,075, the insurer's loading costs are $3,573, and the number of policies is 413, then in a competitive insurance market, each policy will cost $____.

2.If the probability of a house fire is 0.005, the cost of the the fire is $259,569, the insurer's loading costs are $29,237, and the number of policies is 2,320, then in a competitive insurance market, each policy will cost $____.

3.Jimmy will have $95,497 in wealth and a utility of 318 when he is healthy and $36,814 in wealth and a utility of 153 when he is ill. What is Jimmy's expected utility if the chance of illness is 0.05?

4.Jenny will have $188,751 in wealth and a utility of 298 when she is healthy and $100,133 in wealth and a utility of 143 when she is ill. What is Jenny's expected utility if the chance of illness is 0.19?

5.If your wealth is equal to $93,719 when healthy and $27,141 when ill and your probability of illness is 0.17, what is your expected wealth in dollars?

ROUND TO THE NEAREST CENT.

6.If your wealth is equal to $201,467 when healthy and $34,180 when ill and your probability of illness is 13, what is your expected wealth in dollars?

ROUND TO THE NEAREST CENT.

Reference no: EM132679198

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