Author Question: InsuranceYour house is worth $40,000 and the price of housing is not changing. Currently, you have ... (Read 323 times)

Hunchojack2019!! · **on:** Nov 23, 2022

Insurance

Your house is worth $40,000 and the price of housing is not changing. Currently, you have $30,000 in a savings account that pays no interest. There is a 1.25 percent chance of a fire during the next year. If the fire occurs, there will be $30,000 worth of damage. If you do not purchase insurance and a fire occurs, you will pay $30,000 to repair your house. What is the expected value of your wealth (including the value of your home and your savings account) at the end of the year?
An insurance company offers you a fire insurance policy. If a fire occurs, it will pay to repair your home. The fire insurance is fair if the premium for the policy equals the expected value of the claim the insurance policy will have to pay. What premium would you pay for a fair insurance policy?
Please round your final answer to two decimal places.
◦ $69,625.00, $375.00
◦ $68,625.00, $29,625.00
◦ $68,625.00, $375.00
◦ $69,625.00, $29,625.00

miro2222 · **Reply #1 on:** Nov 23, 2022

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 56% of students answer this correctly