8. Individual Problems 20-4Suppose that every driver faces a 4% probability of an automobile accident every year. An accident will, on average, cost each driver $5,000. Supposethere are two types of individuals: those with $30,000.00 in the bank and those with $2,500.00 in the bank. Assume that individuals with $2,500.00in the bank declare bankruptcy if they get in an accident. In bankruptcy, creditors receive only what individuals have in the bank. Assume that bothtypes of individuals are only slightly risk averse.In this scenario, the actuarially fair price of full insurance, in which all damages are paid by the insurance company, is $Assume that the price of insurance is set at the actuarially fair price.At this price, drivers with $30,000.00 in the bank likelyv buy insurance, and those with $2,500.00 in the bank likelybuyinsurance. (Hint: For each typedriver, compare the price of insurance to the expected cost without insurance.)Suppose a state law has been passed forcing all individuals to purchase insurance at the actuarially fair price.True or False: The law will affect only the behavior of drivers with $2,500.00 in the bank.O FalseO True

Answered: Image /qna-images/answer/ccc9661b-697c-412a-8e24-6050a2e6ed50.jpg

Answered: 8. Individual Problems 20-4 Suppose…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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QUESTION 9 A mutual fund has 14 stocks in its portfolio. On a given day, 3 stocks move up, 5 stay the same, and the rest move down. In how many ways could this happen?
Scenario 1: Start working with a $10,000 bonus and then have your boss pay you 10,000 for 3 full weeks including weekends. Scenario 2: Start working with a savings account with a .25 cents in it and your boss double it each day for 3 full weeks including weekends. Question 1: Calculate each scenario individually. Question 2: Calculate the total sum collected by both scenarios at the end of the 3 weeks. Clearly identify the value in each account at the end of 3 weeks. (Hint: Create a table of values for both functions and then add.)
Problem 2. Last year, in a sample of 1200 randomly selected consumers who had opportunities to send in a rebate claim form after purchasing a product A, there are 300 of these people said they never did. This year, if a consumer sends in a rebate claim form, he will get 5 reward points. Observe 1000 randomly selected consumers who had opportunities to send in a rebate claim form after purchasing a product A this year, 200 of these people said they never did. a/ Does this data strongly suggest that the true proportion of such consumers who never apply for a rebate claim after purchasing the product A last year is greater than this year? Test the hypotheses at significance level 0.05 b/ Calculate an lower confidence bound at the 97% confidence level for the true proportion of such consumers who never apply for a rebate claim after purchasing the product A this year
1. Use Bartman Industries and Reynolds Incorporated's stock prices and dividends, along with the Market Index, shown below for the period 1997-2002 to answer the following questions Data as given in the problem are shown below: Bartman Industries Year 2002 2001 2000 1999 1998 1997 Stock Price $17.250 14.750 16.500 10.750 11375 7.625 Dividend $1.150 1.060 1.000 0.950 0.900 0.850 Reynolds Incorporated Stock Price $48.750 52.300 48.750 57.250 60.000 55.750 Dividend $3.000 2.900 2.750 2.500 2.250 2.000 Market Index Includes Divs. 11,663.98 8,785.70 8,679.98 6,434.03 5,602.28 4,705.97 a. Use the data given to calculate annual returns for Batman. Reynolds, and the Market Index, and then calculate average returns over the 5-year period. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already…
Rework problem 22 from section 4.3 of your text, involving a carnival fishpond. Assume that the pond contains 120 fish: 109 blue, 10 orange, and 1 white. A contestant pays $0.60 to randomly catch one fish and receives $0.25 if the fish is blue, $1.00 if the fish is orange, and $13.00 if the fish is white. How much (on average) does the carnival gain on each play? (If the carnival looses money, enter a negative dollar amount)
Question 2 A payment by a corporation to its shareholders is called a: par value. coupon. dividend. stock split.
with calculations and reason.
1. Pretend that in a certain city the number of new cases of COVID was reported to be 200 new cases on Sunday. Let’s pretend that the number of new cases grows by 22% on Monday, and then after that falls by 22% on Tuesday Question C: What percent would the percent increase have to be on Monday to have a total change of zero% from Sunday to Tuesday? i.e. new covid cases go up by ???% on Monday and then down 22% on Tuesday for a total change of 0%. (Use decimals in answer if needed)
Consider the following table containing yields for mutual funds in different asset classes (small, mid, and large cap). Small Cap Fund Explorer Value Small-Cap Value Index Admiral Small-Cap Index Admiral Shares Strategic Small-Cap Equity Explorer Small-Cap Growth Index Admiral Explorer Value Small-Cap ETF Yield (%) 2.93 2.46 1.49 2.91 0.17 0.21 2.67 1.44 Fund Yield by Asset Class Mid Cap Fund Capital Value Mid-Cap Value Index Admiral Extended Market Index Admiral Shares Mid-Cap Index Admiral Shares Mid-Cap Growth Capital Value Strategic Equity Capital Opportunity Admiral Shares Yield (%) 0.96 2.73 1.22 1.52 1.9 0.32 1.54 1.44 sum of squares for treatments≈ 0.6898 sum of squares for error 22.3436 Step 1 of 2: What are the degrees of freedom for the sum of squares for error? Large Cap Fund Equity Income High Dividend Yield Index 500 Index Admiral Shares Diversified Equity FTSE Social Index Growth Equity U.S. Growth Windsor Yield (%) 3.24 3.50 2.73 1.23 1.42 0.58 0.37 1.64
Chapter 6. Crypt-Me-Not Investments, Inc. is a new investment firm that deals exclusively with cryptocurrency investments. An investor wants to invest $75,000 in cryptocurrency next year and approaches them about investing in Solana (SOL) and Dogecoin (DOGE) which are currently selling at $175 and $1.00, respectively. The expected annual return on each unit of SOL is $180 and on each unit of DOGE is $100 and like everyone else, the investor wants to maximize their returns. The risk index associated with each unit of SOL is 1.6 and with each unit of DOGE is 1.8. Crypt-Me-Not recommends not crossing a total risk value of 2500 with the client’s investments. Moreover, since DOGE is substantially cheaper and less risky than SOL, the investor insists that a minimum of 1,000 units of DOGE in the portfolio is necessary. Based on these constraints, formulate a Linear Program and answer the following questions after solving it using Solver in Excel (Round up to the next whole number for first…
Question 5 A certificate of deposit (CD) is a savings plan requiring that a certain amount be left on deposit for a stated time period to earn a specific rate of return. True False
The following information was taken from the financial records of Sodigaz, Inc. Year 2 Year 1 Sales $285,000 $278,500 Accounts receivable: Beginning of year 29,600 18,900 End of year 41,000 29,600 The number of days' sales in receivable for Year 2 is a. 31.8 b. 38.8 c. 24.8 d. 45.2

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