Suppose there are two equal size groups of people, careless drivers and careful drivers. Careless drivers have a 10% chance to have an accident and careful drivers have a 1% chance to have an accident. Both types of people have utility U=Ln(C), where C is the amount of consumption that people have in any period. People spend their entire income of $40,000. In case there is an accident, the cost of car repairs is $10,000. However, insurance companies do not reimburse the full cost of car repairs. Even when individuals are fully insured, individuals have to pay an amount called the deductible. When insurance plans are generous, individuals pay low deductibles, and when insurance plans are not generous, individuals pay high deductibles. For questions (1) to (9), consider the following. Suppose an insurance company has two plans. The first plan is a high deductible plan, which covers car repairs above $7,000 (which is the amount of the deductible). The second plan is a low deductible plan, which covers car repairs above $700 (which is the amount of the deductible). Calculate the actuarially fair premium in the high deductible plan for the careful driver. (Hint: you have to think as if you were the insurance company and consider the expected amount of money that you would expect to reimburse in case of an accident)
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Business, 21.06.2019 18:10
Panera bread is a chain of cafes serving sandwiches, soups, and freshly baked breads. the company began in 1981 with stores primarily located along the east coast of the united states. since then, the firm has expanded to over 1,300 locations throughout the united states and canada. the firm has strong earnings and has been designated by business week as a "significant growth company." panera bread executives are considering the idea of expanding globally by opening cafes in asia through a franchising strategy. which of the following, if true, supports the argument that panera bread should expand into asia through franchising? a: the panera bread menu changes rapidly, and each cafe's artisan bread bakers receive regular training on new recipes. b: panera bread executives want fast access to the asian market without a significant investment of capital. c: panera bread executives want to test the asian market with a short-term commitment that allows them to make quick profits. d: the panera bread mission is to make excellent bread available to customers around the world.
Answers: 2
Business, 21.06.2019 20:30
marketing strategies should be established before marketing objectives are decided. t/f
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Business, 22.06.2019 08:00
Compare the sources of consumer credit(there's not just one answer)1. consumers use a prearranged loan using special checks2. consumers use cards with no interest and non -revolving balances3. consumers pay off debt and credit is automatically renewed4. consumers take out a loan with a repayment date and have a specific purposea. travel and entertainment creditb. revolving check creditc. closed-end creditd. revolving credit
Answers: 2
Suppose there are two equal size groups of people, careless drivers and careful drivers. Careless dr...
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