You have 100/300/50 in insurance coverage. You just got into an accident with a car carrying 15 celebrating nurses. Their total medical bills come to $850,000. How much will your insurance company shell out for this accident? a. $50,000 b. $100,000 c. $300,000 d. $850,000

You have 100/300/50 in insurance coverage. You just got into an accident with a car carrying 15 celebrating nurses. Their total medical bills come to $850,000. How much will your insurance company shell out for this accident? a. $50,000 b. $100,000 c. $300,000 d. $850,000

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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Suppose a company offers a standard insurance contract with a premium (r) of $1,000 and a payout (q) of $10,000. Suppose that Eleanor earns a healthy state income of $30,000, a sick state income of $20,000, and has a 5% chance of becoming ill. From this information, you can determine that the expected profit for the insurance company is likely: O positive O equal to zero O negative
Kindly assist on questions below. (1) A person has wealth of $ 40000. If they have an accident they mush spend $ 30000 on car repairs. Their utility function is given by U = w1/2 where w is equal to their wealth . They do not get into an accident with 90% chance and they get into an accident with 10 % chance. What is the total fair premium for full insurance for this person. (2) Risk pooling can decrease risk if: a) Risks are independent b) risks are dependent c) enough people pool their risk d) if the amount if risk is small enough e) if people have different risk preferences
1. A 40 year old man in the U.S has a 0.242% risk of dying during the next year. An insurance company charges $260 per year for a life-insurance policy that pays a $100,000 death benefit. What is the expected value for the person buying the insurance? Round the answer to the nearest dollar.
Suppose a life insurance company sells a $250,000 one-year term life insurance policy to a 24-year-old female for $360. The probability that the female survives the year is 0.999477. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ (Round to two decimal places as needed.) Which of the following interpretation of the expected value is correct? O A. The insurance company expects to make an average profit of $32.71 on every 24-year-old female it insures for 1 month. O B. The insurance company expects to make an average profit of $359.81 on every 24-year-old female it insures for 1 year. O C. The insurance company expects to make an average profit of $20.84 on every 24-year-old female it insures for 1 month. O D. The insurance company expects to make an average profit of $229.25 on every 24-year-old female it insures for 1 year.
4
Elaine just received an insurance settlement of $25.000. She wants to invest this money today to one day buy a Honda Civic Sl (around $40k) If she can earn an average of 6.5% compounded annually, how much will she have after 8 years? Excel Spreadsheet Equation Sheet O $78,154.59 O $27,857.46 O$41,374.89 O $43.711.23 O $63.711.78 Moving to another question will save this response. D
You are the wage earner in a "typical family," with $60,000 gross annual income. Use the easy method to determine how much life insurance you should carry. O 60,000 O 120,000 294,000 420,000
You have a 70/30 medical insurance policy with a $1,500 premium and an $850 deductible. You had major surgery totaling $64,200. How much will you have to par for this bill? Max out of pocket is $9100. Group of answer choices $19,005 $19,260 $9100 $19,855
How much money will a patient using this insurance plan have to pay for a $4200 medical bill?
5. Mr. Johnson wants to buy insurance against his house burning down. The insurance will pay Mr. Johnson $500,000 if his house burns down. The probability that Mr. Johnson's house will burn down in a given year is 0.005, so the probability that it will not burn down is 0.995. The insurance premium for the policy is $2,000 per year. (a) Determine the expected return for the insurance company. (b) Because the insurance company is losing money on house insurance, a company officer asks the premium manager to determine the annual premium required for the insurance company to make $1,000 on each $500,000 policy. Determine the annual premium.
Q2. While travelling to Dammam, Qassim is admitted to hospital for major car accident and need major surgery. His maximum out-of-pocket is SR15, 000. In your health insurance policy stated the following clause on coinsurance and deductible. Calendar year Deductible is equivalent to SR5, o00 and Coinsurance is 25%. The following is the charges from the treatment: Outpatient x rays and tests is SR5, o00 Ward and facility charges is SR20, o00 Surgeon's fee is SR, 10,000 Prescription drugs is SR7, 000 Therapy expenses is SR 8, 000 Plastic surgery is SR10,000 Dental is SR 5,000 Calculate how much you will get coverage from your insurance company based on the above charges. Your calculation will include: i. Deductible ii, Coinsurance Total out of pocket Total amount the insurance company will pay to you. iii. iv.
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