PERSONAL FINANCE ETEXT TURNING MONEY
8th Edition
ISBN: 9780136879015
Author: KEOWN
Publisher: PEARSON
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Chapter 6, Problem 4DC1
Summary Introduction
To discuss:
Comparison of the credit card choices available.
Introduction:
Credit card is a plastic card which allows the user to pay for purchase of goods and services. It also allows paying more than what they have on their account.
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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 6 Solutions
PERSONAL FINANCE ETEXT TURNING MONEY
Ch. 6 - Prob. 1PACh. 6 - Prob. 2PACh. 6 - Prob. 3PACh. 6 - Prob. 4PACh. 6 - Prob. 5PACh. 6 - Prob. 6PACh. 6 - Prob. 7PACh. 6 - Prob. 1DC1Ch. 6 - Prob. 2DC1Ch. 6 - Prob. 3DC1
Ch. 6 - Prob. 4DC1Ch. 6 - Prob. 5DC1Ch. 6 - Prob. 6DC1Ch. 6 - Prob. 7DC1Ch. 6 - Prob. 8DC1Ch. 6 - Prob. 9DC1Ch. 6 - Prob. 10DC1Ch. 6 - Prob. 11DC1Ch. 6 - Prob. 1DC2Ch. 6 - Prob. 2DC2Ch. 6 - Prob. 3DC2Ch. 6 - Prob. 4DC2Ch. 6 - Prob. 5DC2Ch. 6 - Prob. 6DC2Ch. 6 - Prob. 7DC2Ch. 6 - Prob. 8DC2Ch. 6 - Prob. 9DC2Ch. 6 - Prob. 10DC2
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