What is the minimum investment yield the company requires

Assignment Help Financial Management

Reference no: EM131902141

1. You deposit $7500 annually into a life insurance fund for the next 20 years, at which time you plan to retire. Instead of a lump sum, you wish to receive annuities for the next 20 years. What is the annual payment you expect to receive beginning in year 21 if you assume an interest rate of 7 percent for the whole time period?

2. Suppose the loss ratio on a line of property insurance is 76 percent, the expense is 25 percent, the dividend ratio is 2 percent, and the investment yield is 7 percent. How profitable is this line?

3. An insurance company's projected loss ratio is 80 percent, its loss adjustment expense ratio is 18 percent, and the dividend ratio is 3 percent. What is the minimum investment yield the company requires to earn a 4% profit?

Reference no: EM131902141

Questions Cloud

Prepare journal entry or entries that lightning would use : Prepare the journal entry or entries that Lightning would use to record the payroll. Include both employee and employer taxes.

What is the percentage change in price : What is the percentage change in price for a 50 basis point decrease in yield for $1000 par value?

Draw the total cost line for each location : Xun Company located at Dayton, Ohio, is looking at building up factories either at Cincinnati, Columbus, or Cleveland. They have estimated the following.

Discuss time value of money and its importance : Discuss time value of money and its importance. Explain the relationship of discounting and compounding.

What is the minimum investment yield the company requires : An insurance company's projected loss ratio is 80 percent, its loss adjustment expense ratio is 18 percent, and the dividend ratio is 3 percent.

Calculate the companys gross profit under fifo : The LIFO Inventory Reserve Waterloo Manufacturing Company uses the LIFO inventory costing method. Calculate the company's gross profit under FIFO.

What is an open system : Each year Training Magazine celebrates organizations that have excelled at employee training and development. Visit their website.

Describe the definition of risk as it is understood : Describe the definition of risk as it is understood in the financial world. Your response must include something about variability of returns.

Hypothesis testing and interpret correlational data : Criterion: Complete hypothesis testing and interpret correlational data. Data: Use this dataset:

User Account

All Pages