How much the health insurance company will reimburse him

Assignment Help Business Economics
Reference no: EM132492500

John believes he faces health costs in the current year of either $2,000 dollars with a probability 0.9 or $12,000 with a probability 0.1.

a. He can purchase a complete insurance for $4,000. Is the premium actuarily fair?

b. John obtains a major medical and hospital policy that covers all costs, aside from a 600 deductible and 10% coinsurance rate. If John actually incurs annual health charges of $4,000 dollars by how much the health insurance company will reimburse him?

c. A consumer faces a choice between a gold plan with lower coinsurance rate and higher premium, and a bronze plan with higher coinsurance rate and lower premium. Otherwise the plans are the same. If the consumer is risk averse, and rational, will the consumer choose the gold plan, the bronze plan, or is either possible?

Reference no: EM132492500

Questions Cloud

What will the stock price per share be : A bond investment is available that pays a tax-free 8%. The corporate tax rate is 35%. Ignoring risk, what is the pre-tax return on taxable bonds?
Describe the overall movements of short and long term : Describe the overall movements of short and long term real interest rates over the past 30 years. Are real interest rates roughly constant over time?
What are the assumptions about dividend payout in h model : The stock is expected to have a cost of equity of 10%. Estimate the value of the stock using H Model. What are the assumptions about dividend payout
Calculate cash collected from customers : Calculate cash collected from customers. Calculate the cash paid to purchase new PPE. Calculate the cash paid for wages. Calculate the dividend paid
How much the health insurance company will reimburse him : John believes he faces health costs in the current year of either $2,000 dollars with a probability 0.9 or $12,000 with a probability 0.1.
Prepare journal entries to record the issue of the debenture : Prepare the journal entries to record the issue of the debentures and the annual interest payments on 30th June 2019. Great Sand Ltd offers $200 million
Compute what is the investment income for the current year : 10% cumulative preference share capital at P 1,000,000 and Ordinary share capital at P 7,000,000 What is the investment income for the current year?
Effects of coronavirus on canadian economy : What are the effects of CORONAVIRUS on canadian economy?
What is the investment income for the current year : What is the investment income for the current year? Moss Company owned 20% of Dubro Company's preference share capital.

Reviews

Write a Review

Business Economics Questions & Answers

  Would there be any automatic stabilizers government budget

would there be any automatic Stabilizers in government budget. Would re be any distinction between full-employment deficits and actual beget deficit.

  Find ending margin account balance

Find your ending margin account balance (in USD) the day after you open your position (3/2) if the futures price is $1.049 on that day.

  Macroeconomic equilibrium is equal to the potential gdp

Assume that Japan's macroeconomic equilibrium is equal to the potential GDP. As consumers around the world become more environmentally aware

  Explain forward exchange rates determination

Which of the following is used to explain forward exchange rates determination? Nonexclusionary, as it relates to public goods means,

  Estimate a binomial parameter

Why is it easier to estimate a binomial parameter when it is closer to 0 or 1 than when it is 0.50?

  Principle theory of management

Principle theory of management

  Total value created in the market for sporting guns

Compute the competitive equilibrium price and quantity. As well, compute the total value created in the market for sporting guns. Clearly show all calculation and illustrate your answer using a well-labeled graph.

  What is the future worth in sally savings account

What is the future worth in Sally's savings account at the end of the 7 years, if the account earned 6% annual interest, compounded monthly?

  What is the implied nominal exchange rate

If the Law of One Price holds true, what is the implied nominal exchange rate? Enter your answer as the number of Yuan per dollar. Round to the nearest whole Yuan.

  Access the western national news online newspaper

Access the Western National News Online Newspaper. This is the link: http://paper.li/evansjcksn/1348241196 Find at least three blogs or news reports surrounding the Anti-Islamic Video Protest that began in Lybia.

  Average nominal interest rates on six-month treasury bills

The following table shows the average nominal interest rates on six-month Treasury bills between 1971 and 1975, which determined the nominal interest rate that the U.S. government paid when it issued debt in those years. The table also shows the infl..

  What will be the long-run impact of the electronic payments

What can the central bank do, if anything, to counteract the short-run changes in output and prices? If the central bank does not take any policy actions, what will be the long-run impact of the electronic payments system on prices and output?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd