Why individuals and organizations purchase insurance policy

Reference no: EM131337441

1. On average, the expected value of returns from each $1 of premiums paid on an insurance policy is less than $1; this is due to the insurance company's administrative costs and profits. In spite of this fact, why do so many individuals and organizations purchase insurance policies?

2. Describe how certainty equivalent cash flow estimates can be derived for individual project cash flows.

3. Will all individuals apply the same certainty equivalent estimates to the cash flows from a project? Why or why not?

Reference no: EM131337441

Questions Cloud

What are the main areas of the audit opinion : Who are the external auditors? Did the external auditors rely on other auditors? Which specific standards followed? What are the main areas of the audit opinion? Other external auditing-related issues expressed in corporate filings.

How can a computer simulation model be helpful : How can a computer simulation model be helpful to the typical decision maker who is making a one-time-only investment decision?

Compare kubler-ross stages of death and dying : Compare and contrast Kubler-Ross' stages of death and dying, and Worden's task of mourning. Which model would you use, and why? Would there ever be a time that you would use both models to help a person out, and why

Description of your three potential research topics : A brief description of your three potential research topics. A list of hypotheses identified from 3 peer-reviewed research articles. Be sure to submit a link to or a copy of each article to your instructor, along with your paper

Why individuals and organizations purchase insurance policy : Will all individuals apply the same certainty equivalent estimates to the cash flows from a project? Why or why not?

What is the heat flux at the plate surface : If a third plate, 20 mm thick, is suspended midway between the original plates, what is the surface heat flux for the original plates? Assume the temperature and flowrate of the gas to be unchanged and radiation effects to be negligible.

Compute the cofficient of variation of annual cash flows : Compute the expected annual cash flow.- Compute the standard deviation of annual cash flows.- Compute the cofficient of variation of annual cash flows.

Manager and leader in a diverse organization : You are a manager and leader in a diverse organization (McDonald's) that includes locations in many other countries. You are asked to create a presentation to share your experiences regarding leadership

Determine the heat transfer rate from the duct to the air : Determine the heat transfer rate from the duct to the air and the air outlet temperature.

User Account

All Pages