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yed by Safe Business has a 2 percent chance 00 to each unemployed worker. um amount you would charge Risky Business fo um amount you would charge Safe Business for Du charge the same premium to both businesse nt insurance. The minimum amount you would

yed by Safe Business has a 2 percent chance 00 to each unemployed worker. um amount you would charge Risky Business fo um amount you would charge Safe Business for Du charge the same premium to both businesse nt insurance. The minimum amount you would

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Unemployment Insurance. Each worker employed by Risky Business has a 20 percent chance of losing his or her job in the next year. Each worker employed by Safe Business has a 2 percent chance of losing his or her job. You manage an insurance company that provides a lump sum of $10,000 to each unemployed worker. a. The minimum amount you would charge Risky Business for each employee covered by the unemployment policy is $. (Enter your response as an integer.) b. The minimum amount you would charge Safe Business for each employee covered by the unemployment policy is $ (Enter your response as an integer.) c. Suppose you charge the same premium to both businesses. The companies have the same number of workers and are required to purchase unemployment insurance. The minimum amount you would charge is $. (Enter your response as an integer.)
Transcribed Image Text:Unemployment Insurance. Each worker employed by Risky Business has a 20 percent chance of losing his or her job in the next year. Each worker employed by Safe Business has a 2 percent chance of losing his or her job. You manage an insurance company that provides a lump sum of $10,000 to each unemployed worker. a. The minimum amount you would charge Risky Business for each employee covered by the unemployment policy is $. (Enter your response as an integer.) b. The minimum amount you would charge Safe Business for each employee covered by the unemployment policy is $ (Enter your response as an integer.) c. Suppose you charge the same premium to both businesses. The companies have the same number of workers and are required to purchase unemployment insurance. The minimum amount you would charge is $. (Enter your response as an integer.)
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