#title.health insurance., Financial Econometrics

Assignment Help:
Ask Sita expects her future earnings to be worth Rs. 100. If she falls ill, her expected future earning will be Rs. 25. There is a belief that she may fall ill with probability of + , while the probability of remaining in good health is - ,. Let her utility function be given as U( y) = ./ *. suppose that an insurance company offers to fully insure Sita against loss of earnings caused by illness against
an actuarially fair premium.
(a) Will Sita accept the insurance? Explain.
(b) What is the maximum amount that Sita would pay for the insurance?
question #Minimum 100 words accepted#

Related Discussions:- #title.health insurance.

Interest rate parity and interest arbitrage theories, Below is information ...

Below is information about the spot and forward rates for three currencies against the US dollar (USD): (a) Critically discuss the interest rate parity and covered interest

Differentiate between ordinary shares and preference shares, Differentiate ...

Differentiate between Ordinary shares and Preference shares. Briefly explain three characteristics that any security for a loan should have.

Options, Four European vanilla Call options ()iC· on an underlier with no i...

Four European vanilla Call options ()iC· on an underlier with no interim cash flows, have identical maturity T. Their strike prices iK are such that 1234KKKK A trader buys ()1CK an

Options, Four European vanilla Call options ()iC· on an underlier with no i...

Four European vanilla Call options ()iC· on an underlier with no interim cash flows, have identical maturity T. Their strike prices iK are such that 1234KKKK A trader buys ()1CK an

Economies of scale attribute, How can economies of scale be a characteristi...

How can economies of scale be a characteristics that makes for a good industry (please be specific) and what industry (besides automobiles) do you consider to be a "good industry"

APPLIED FINANCIAL ECONOMETRICS, Question 1 Suppose that you have 150 obser...

Question 1 Suppose that you have 150 observations on production (yt) and investment (it), and you have estimated the following ADL(3,2) model: (1 – 0.5L – 0.1L2 – 0.05L3)yt = 0.7

Aggressive working capital policy, All the non-current assets and part of p...

All the non-current assets and part of permanent assets financed by long term. Remaining permanent assets all temporary fluctuating assets by short term. £65m long term debt and eq

What are the major methods of economic forecasting, Question: (a) Why i...

Question: (a) Why is a disturbance term included in a regression? (b) What are the properties of an OLS estimator? (c) Outline the major steps involved in the application

What is propulsion division, In May 2003, Gencorp acquired Sequa Corp.'s pr...

In May 2003, Gencorp acquired Sequa Corp.'s propulsion subsidiary ARC for $133million in cash and $11 million in transactions costs. Table below lists selected information about

Show example on aggressive working capital policy, Q. Show example on aggre...

Q. Show example on aggressive working capital policy? With an aggressive working capital policy, a company would hold minimal levels of inventories in order to minimise costs.

Write Your Message!

Captcha
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