Find the smallest possible premium for each

Reference no: EM131001695

On a single premium contract, the present value of the benefits takes the value 0 with probability 0.94, 1 with probability 0.01 and 3 with probability 0.05.

(a) Find the percentile premium for α = 0.95.

(b) Suppose the insurer plans to sell 2 contracts. Find the smallest possible premium for each, such that there is a probability of at least 0.95 that the total premiums will cover the total benefits on both contracts.

Reference no: EM131001695

Questions Cloud

What value of rmax would be required : The electrical supply is 130 V (rms) at 61.0 Hz; the lightbulb is rated as "130 V,1100 W." What value of Cmax is required if the rate of energy dissipation in the lightbulb is to be varied by a factor of 5 from its upper limit of 1100 W? Assume t..

Situation calculus and a theorem prover : Finally, he has to press the BIG RED BUTTON (which only works when the two components are joined together) in order to cause something horrible to happen. Evil Robot's internal systems have been constructed using the situation calculus and a theor..

What electric field strength is needed between electrodes : One type of ink-jet printer, called an electrostatic ink-jet printer, forms the letters by using deflecting electrodes to steer charged ink drops up and down vertically as the ink jet sweeps horizontally across the page. The ink jet forms 32.0μm -..

Find the expectation and variance of the benefits : Find the expectation and variance of the benefits when (a) benefits are payable at the end of the year of death; (b) benefits are payable at the moment of death.

Find the smallest possible premium for each : Find the smallest possible premium for each, such that there is a probability of at least 0.95 that the total premiums will cover the total benefits on both contracts.

Determining the amount of andrew basis in the property : In the current year, Andrew received a gift of property from his uncle. At the time of the gift, the property had a FMV of $114,000 and an adjusted basis to his uncle of $70,000. After deducting the annual exclusion, the amount of the gift was $10..

What would be other valuable things to look at : For Online Physics 2110, Calculus Based, RODP in Tennessee is the webassign important on the final. If not, which it was not for the midterm, what would be other valuable things to look at?

Indirect method to direct method for reporting cash flows : For the current year, Packers Company decided to switch from the indirect method to the direct method for reporting cash flows from operating activities on the statement of cash flows. Will the change cause the amount of net cash flow from operati..

How community policing compares to the other policing : Review the City of Boise Community Policing Web site, and think about how community policing compares to the other styles of policing

User Account

All Pages