An insurance company uses the model of collective risks in multiple periods by means of a Poisson-compound-Exponential process. The Poisson intensity equals 20, and the mean claim per period is of $140. The company plans to continuosly charge the equivalence premium with a loading percentage of 55%. What should the initial wealth of the company be, so that the probability of ruin is less than 5%?
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- The demand for a product of Carolina Industries varies greatly from month to month. The probability distribution in the following table, based on the past two years of data, shows the company's monthly demand. Unit Demand Probability 300 400 500 600 0.20 0.30 0.35 0.15 (a) If the company bases monthly orders on the expected value of the monthly demand, what should Carolina's monthly order quantity be for this product? (b) Assume that each unit demanded generates $70 in revenue and that each unit ordered costs $50. How much will the company gain or lose in a month (indoitars) if it places an order based on your answer to part (a) and the actual demand for the item is 300 units?An investment plan allows investors to deposit a minimum of £1,000 at the beginning of the term, which pays a fixed return rate of 5% per annum. Af- ter a year, investors have to deposit a minimum of £800 with an expected return rate of 3% per annum for the second year and a standard deviation of 2% per annum. a. Find the expected value of the total minimum amount earned after two years of investment. b. Find the standard deviation of the total minimum amount earned after two years of investment.Guy Fieri has purchased a significant plot of land in Northwest Ohio for his newest venture: FlavorTownship. This hub for mind-boggling flavor and entertainment is a strictly for-profit operation. Guy would like to keep Flavor Township open all year-round, but due to Ohio weather the following are the probabilities of when it will be open: |- 30% chance it is open 300 days a year |- 55% chance it is open 325 days a year |- 15% chance it is open 350 days a year Flavor Township will expect to host 14,000 people each day that it is open and expects an average revenue of $45 per visitor. This paradigm-shifting landmark will cost $420,000,000 to start the investment and will require annual costs (food, employees, etc.) of $115,000,000. Every 3 years, Flavor Township will undergo necessary maintenance that will cost $22,000,000. If the expected life of Flavor Township is 15 years and a 16% return is expected, what is the expected NPV of this project?
- The owner of a ski resort is considering installing a new ski lift that will cost $900,000. Expenses for operating andmaintaining the lift are estimated to be $1,500 per day when operating. The U.S. Weather Service estimates thatthere is a 60% probability of 80 days of skiing weather per year, a 30% probability of 100 days per year, and a 10% probability of 120 days per year. The operators of the resort estimate that during the first 80 days of adequate snow in a season, an average of 500 people will use the lift each day, at a fee of $10 each. If 20 additional days are available, the lift will be used by only 400 people per day during the extra period; and if 20 more days of skiing are available, only 300 people per day will use the lift during those days. The owners wish to recover any invested capital within five years and want at least a 25% per year rate of return before taxes. Based on a before-tax analysis, should the lift be installed?Please no written by hand and no emage Suppose a company can select among two decisions (d1 and d2) and face three states of nature (s1, s2 and s3) with the following payoff table: Decision s1 s2 s3 d1 150 200 200 d2 50 200 500 The probabilities of s1, s2, and s3 are unknown. Using the optimistic approach, what is the optimal decision and what is the value of the payoff? Place the optimal decision in the first answer box and the maximum payoff used to arrive at this decision in the second.An estate agent advertises its houses in two media; Daily Graphic and Ghanaian Times. The agent believes that there is a relationship between the sales S and the amounts spent on the two advertising media. The relationship is given by; where, d is the amount spent in Daily Graphic and g is the amount spent in Ghanaian Times. The estate’s agent fee is 12½% and this includes the cost of adverting. If the agent has planned to spend only 200 thousand Ghana Cedis on advertisement, show how it should be allocated between the two media in order to maximize net profit.
- themepans i max Task 3: During the last 10 years, a corporation's net profit increased year over year 6 times and decreased year over babive969 with characteristicsmber of annual earnings increases for the next 10 years is modelled in 4 times. Assume that the accordance with quote of the binomial distribution. Estimate the probability that the corporation's net profit will increase in exactly 4 of the next 10 years. tot twee monteutimut ethomi smo bsd-.2.U A :clesT Diswiot brs toqe ert tuods noitsmotnleysb 08 ni utimut to insmqinle 6 101 000,000,83 vsqof ever lliw 2.0 woled nevig ai 29161 (AU3 8.0 ataoo 020) 008.0 02U AU3 eer.o 020 A03 9161 toqe tre etsi biswiot ysb-08Problem 1 Synergy Company sells co-amoxiclav antibiotic. The probability distribution of the demand for co-amoxiclav antibiotic is as follows: Estimated Sales in Units 120 units 210 units 300 units Probability 0.12 0.18 0.22 The estimated demand for co-amoxiclav antibiotics this coming month using the expected value approach is 1. How much is Expected Value? S =Explain probability and nonprobability samplingtechniques.
- Risk difference may sometimes be referred to as excess risk. True Falser.edu/courses/97574/quizzes/357143/take ch results - yaz... Question 23 Consider the following probability distribution. xi 0 M Question Mode: M... 1 2 3 O 2.5 0.9 O 1.9 P(X = xi) O 1.5 0.1 The expected value is 0.2 0.4 0.3 Question 24 An analyst has constructed the following probability distribution for firm X's predicted return for upcoming year.Q4: An investor invests $1000 a month, on average, in a stock market security. Because the investor must wait for good "buy" opportunity, the actual time of purchase is random. The investor usu- ally keeps the securities for about 3 years on the average but will sell at random times when a good "sell" opportunity presents itself. Although the investor is generally recognized as a shrewd stock market player, past experience indicates that about 25% of the securities decline at about 20% a year. The remaining 75% appreciate at the rate of about 12% a year. Estimate the inves- tor's (long-run) average equity in the stock market. Hint: use the average number of securities in the market.