EBK PERSONAL FINANCE
7th Edition
ISBN: 8220100659713
Author: KEOWN
Publisher: PEARSON
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Question
Chapter 16, Problem CC.16Q
Summary Introduction
To explain:
The reason of avoiding probate and the four steps that the D could take to avoid probate.
Introduction:
Probate refers to the process by which the court supervises the will of an individual and validates it. It includes the distribution of the assets and other belongings by the court as per the will.
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Question 6
A five-year $50,000 endowment insurance for (60) has $1,000 underwriting expenses, 25% of the first
premium is commission for the agent of record and renewal expenses are 5% of subsequent premiums.
Write the gross future loss random variable:
Presuming a portfolio of 10,000 identical and independent policies, the expected loss and the variance
of the loss of the portfolio are given below (note that the premium basis is not given or needed):
E[L] = 10,000(36,956.49 - 3.8786P)
V[L] 10,000 (50,000 + 14.52P)². 0.00095
Find the premium that results in a 97.5% probability of profit (i.e. ¹ (0.975) = 1.96).
Premium:
Please show your work below
Chapter 16 Solutions
EBK PERSONAL FINANCE
Ch. 16 - Prob. 1PACh. 16 - Prob. 2PACh. 16 - Prob. 3PACh. 16 - Prob. 4PACh. 16 - Prob. 5PACh. 16 - Prob. 6PACh. 16 - Prob. 7PACh. 16 - Prob. 8PACh. 16 - Prob. 1DC1Ch. 16 - Prob. 2DC1
Ch. 16 - Prob. 3DC1Ch. 16 - Prob. 4DC1Ch. 16 - Prob. 5DC1Ch. 16 - Prob. 6DC1Ch. 16 - Prob. 7DC1Ch. 16 - Prob. 8DC1Ch. 16 - Prob. 9DC1Ch. 16 - Prob. 10DC1Ch. 16 - Prob. 1DC2Ch. 16 - Prob. 2DC2Ch. 16 - Prob. 3DC2Ch. 16 - Prob. 4DC2Ch. 16 - Prob. 5DC2Ch. 16 - Prob. CC.1QCh. 16 - Prob. CC.2QCh. 16 - Prob. CC.3QCh. 16 - Prob. CC.4QCh. 16 - Prob. CC.5QCh. 16 - Prob. CC.6QCh. 16 - Prob. CC.7QCh. 16 - Prob. CC.8QCh. 16 - Prob. CC.9QCh. 16 - Prob. CC.10QCh. 16 - Prob. CC.11QCh. 16 - Prob. CC.12QCh. 16 - Prob. CC.13QCh. 16 - Prob. CC.14QCh. 16 - Prob. CC.15QCh. 16 - Prob. CC.16QCh. 16 - Prob. CC.17QCh. 16 - Prob. CC.18QCh. 16 - Prob. CC.19QCh. 16 - Prob. CC.20Q
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