16. Assume you purchased shares in The McGuire Mutual Fund at $12 per share at the beginning of 2019 and paid a front-end load of 5%. If the securities in the McGuire Mutual Fund increased in value by 10% during 2019 and the fund’s expense ratio was 1.5%. Ignoring taxes and transaction costs, what rate of return would an investor receive last year on an investment in the McGuire Mutual Fund?

An insurance company estimates the probability of an earthquake in the next year to be 0.0015. the average damage done to a house by an earthquake it estimates to be $90,000. if the company offers earthquake insurance for $150, what is company`s expected value of the policy? hint: think, is it profitable for the insurance company or not? will they gain (positive expected value) or lose (negative expected value)? if the expected value is negative, remember to show "-" sign. no "+" sign needed for the positive expected value