Which type of risk attitude is exhibited by a property owner who decides to buy property insurance with a higher deductible in order to lower premium costs? a. risk obsessed b. risk seeking c. risk avoiding d. risk optimizing.

Which type of risk attitude is exhibited by a property owner who decides to buy property insurance with a higher deductible in order to lower premium costs? a. risk obsessed b. risk seeking c. risk avoiding d. risk optimizing.

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter13: Investment Fundamentals

Section: Chapter Questions

Problem 8LTAI

See similar textbooks

Related questions

Q: Q1(a). The single-family home won't generate any income after rent, but you anticipate a significant…

Q: If a lending institution stipulates that a borrower must maintain an adequate insurance policy, this…

A: A loan is a type of debt that a person or another entity assumes. The lender, which is often a…

Q: Use the information below to calculate WACC given the Market Capitalization of the company:…

A: Free Cash Flow (FCF) of the firm is calculated using EBIT. Value of a firm is the present value of…

Q: Check all that apply: Owhen IRR is positive, the project is acceptable when profitability index is…

A: IRR is the internal rate of return at which present value of cash flow is equal to initial…

Q: Company decided to change its capital structure. Long term loan will be increased from 3 mio to 20…

A: A company is undergoing change in capital structure. We need to find the break even EBIT and then…

Q: What is the order of payment to the investors from the highest to the lowest priority? Multiple…

A: concept. On liquidation of company , all the assets of company are realized and then all the…

Q: Assume that time today is Dec. 13, 2022. Determine what is being asked in each problem. 1.…

A: Simple Interest is a daily calculation of interest and added to the principal amount. The total…

Q: The Tribiani Company just issued a dividend of $2.20 per share on its common stock. The company is…

A: Cost of equity is calculated using following equation Cost of equity = D0×1+gP0+g Where, D0 is…

Q: 1. Which of the following is NOT a reason that a mutual fund would be holding cash/liquid ETFs? a.…

A: There are several multiple choice questions here. We will answer them one by one.

Q: 3. Becktell Industries has an offer to build a special product for the state highway patrol. The…

A: Net Present Value: NPV represents a measure of profitability for a project or an investment. Thus,…

Q: ne Oil & Gas is considering an investment in Perfect Lease. Given the following information,…

A: Payback period is the period required to recover the initial amount of investment and do not…

Q: Determine the tax rate. Round to the nearest cent or nearest hundredth. Assessed property value:…

A: The tax rate can be determined in the following manner: (Expenses to be funded by property…

Q: Assume that time today is Dec. 13, 2022. Determine what is being asked in each problem. 1. Ken has…

A: We have three different problems based on time value of money. We need to solve for the missing…

Q: Which of the following are common POSITIVE bank covenants? Indicate ALL that apply. Achieve a…

A: Positive bank covenant are the covenants meant for maintaining the financial health and well-being…

Q: Use the information below to calculate WACC given the Market Capitalization of the company:…

A: WACC (Weighted average cost of capital): WACC describes the average cost of capital of the company.…

Q: Mark and his partners have contracted to purchase the franchise rights, worth $123,000, to open and…

A: Future value is the value of the initial amount along with accumulated interest on the amount.

Q: Fourteen years and three months ago, you took out a 30- year loan of $300,000. The loan has a 7% APR…

A: Mortgage payments are the fixed amount paid by the borrower to the lender that includes the interest…

Q: Columbia Sheetmetal is thinking about purchasing a new machine that will have an expected life of 8…

A: The IRR is a measure of the profitability of a project. It signifies the maximum return for which…

Q: 8. Calculate the semi-annual rate convertible monthly, from 38% convertible semi-annually.

Q: Consider a loan of $1,000 for five years with 10% add-on interest and the loan is to be paid off in…

A: Internal rate of return is rate of return where present value of cash outflows is equal to present…

Q: Which of the following would be the first source of capital? a Internal funds B) Stock issuance…

A: Capital of a company, The fund required by a company on a daily basis to run its operations is known…

Q: In this question, you will calculate the value of a levered firm with corporate taxes. Assume that…

A: A levered firm is one which has leverage or debt in its capital structure. The value of the levered…

Q: currently

A: 1. Hedging through Forward 2. Believing in the advice of the Financial Controller. 3. Money Market…

Q: In your opinion, do the following Bank Products fall into a Routine, Limited or Extensive product…

A: Routine, limited, and extensive are categories used to describe the level of complexity and…

Q: Coco borrowed ₱100,000 and wishes to repay Kobe at the end of each month with payments of ₱3,000 for…

A: Loan amount (P) = 100,000 Monthly payment (C) = 3,000 Monthly interest rate (r) = 0.0075 (i.e. 0.09…

Q: Imagine all investors are risk-neutral and we have the following binomial tree: 0 Stock: So= 80 D 1…

A: As per the given information: Current stock price - $80Strike price - $92Risk-free rate -…

Q: You purchase a $100,000 bond futures contract at 96.5. a) Assume that the bond…

A: There is a sale purchase transaction of bond futures. The prices have changed over time. We have to…

Q: A defined benefit plan has 100 employees with a majority of them over age 40. The pension fund…

A: Defined benefit plan - This is an employer sponsored predetermined pension payment plan. This plan…

Q: The S&P 500 Index returned: 5.1%, 6.9%, -7.3%, -8.1%, 7.2% Over the same period, BergAwesome Inc.…

A: To solve this question, we need to make use of regression analysis. The S&P Index returns are…

Q: payment of $8000 due 15 months ago and $6000 due in six months are to be replaced by a payment of…

A: The concept of TVM states that the same amount is worth more today than later because of the…

Q: Describe a credit default swap and its purpose. Note the rationale for the protection buyer and the…

A: The question to above are answered below:

Q: What is the discounted value of payments The discounted value is $ Round the final answer to the…

A: Present value is the equivalent value of the money today based on the time period and interest rate…

Q: uppose that the current EUR/GBP exchange rate is £0.86 per euro. The current 6-month interest rates…

A: In the international business exchange rate matter the most and the volatility in the exchange rate…

Q: Convertible preferred stock is normally converted into a. shares of common stock b. warrants c.…

A: Conversion of convertible preferred stock / convertible bonds is usually at option of holder of…

Q: Misu Sheet, owner of the Bedspread Shop, knows his customers will pay no more than $145 for a…

A: Mark up are important for business and companies because they can not survive without profit and…

Q: Assume a 12% reserve requirement. What is the maximum increase in the money supply of a 283,465…

A: The banks are required to hold a portion of bank deposits to meet the liabilities when there is a…

Q: Charges in the fair value of the effective portion of a hedging financial instrument are recognized…

A: Fair value hedge - It is related to a fixed value item and the fair value changes to hedging…

Q: Assume the CAPM holds. You are holding a portfolio with the beta of 2 and the standard deviation of…

A: We have an inefficient portfolio here. We have to make it efficient and find out the possibility of…

Q: Complete the following using present value. (Use the Table 12.3.) Note: Do not round intermediate…

A: Present value refers to the money present today that is more worthful than the amount will receive…

Q: 2. An independent contractor is trying to decide whether to lease new equipment now or save his…

A: Present value of cashflows is computed by discounting future cash flows with the help of discount…

Q: Ay 3. Commercial Banks and their financial statements with Off-balance sheet activities.

A: Off-balance sheet activities are those activities that are not reported on a company's balance…

Q: Which of the following types of insurance does NOT involve a contract with an external party? a.…

A: Introduction Insurance is a form of risk management that helps to protect individuals and businesses…

Q: Compute the size of the final payment for the following loan. Periodic Principal $ Payment $ 9900…

A: The periodic payment is made at the regular interval to pay the loan or debt. The loan can be repaid…

Q: 2 a lemon farmer hedges the spot price of lemons in 2 months time by shorting a 2 month orange…

A: Risk is uncertainty or potential financial loss due to a change in the price of the market of a…

Q: Find the depreciation for the indicated year using MACRS cost-recovery rates for the properties…

A: Depreciation for a 3 year property in the 3rd year = Value of property*Depreciation rate in the 3rd…

Q: Expansion of plant is on the pipeline of Winter Snow Company starting on 2023. The project of…

A: The Bank interest rate is helpful in calculating the investment performance in a specified period…

Q: Case:As a speculative investor, you can make profits by combining two option trades. Assume that you…

A: The investor believes in poor volatility so getting long either for a call and put is not going to…

Q: A firm has outstanding converitlble preferred stock with a $50 par value which is convertible into…

A: Conversion value (C) = $45 Number of common shares for each preferred share (n) = 3 Market price…

Q: Which of the following are in keeping with Corporate Governance? a Shareholders own the…

A: Corporate governance is a set of systems on the back of which a company moves forward in a…

Q: EOY O (Investment) BTCF 1 1,000,000 2 (1,000,000) ddition, the salvage value of the project at the…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Concept explainers

Property Insurance

Property insurance protects property from unforeseeable loss or damage and covers property owners' liability. Property insurance provides financial compensation to the property owner or renter in the event of damage or theft, as well as to someone other than the owner or renter if that person is injured on the property. Property insurance covers all risks of damage caused by theft, fire, flood, cyclones, lighting, and natural calamities, among other things. The primary goal of property insurance is to require the property owner to cover the loss. A monthly premium is paid to the insurance company, and in exchange, the insurance company pays for damage based on the agreement stated in the policy. Property insurance protects assets such as a vehicle, auto, car, rental home, house, and valuable property.

Question

Which type of risk attitude is exhibited by a property owner who decides to buy property insurance with a higher deductible in order to lower premium costs?

a. risk obsessed

b. risk seeking

c. risk avoiding

d. risk optimizing.

Need typed answer only.Please give answer within 45 minutes

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

According to the risk management process in ISO 31000, which of the following is a necessary step in risk assessment? Select one: A. Risk treatment B. Risk transfer C. Risk analysis D. Risk minimisation #### i want answer within one hour,Thanks
Imagine that you are a financial manager researching investments for your client. Think of a friend or a family member as a client. Define their characteristics and goals such as an employee or employer, relatively young (less than 40 years) or close to retirement, having some savings/property, a risk taker or risk averter, etc. Next, use Nexis Uni at the Strayer University library, located at Nexis Uni, click on “Company Dossier” to research the stock of any U.S. publicly traded company that you may consider as an investment opportunity for your client. Your investment should align with your client’s investment goals. (Note: Please ensure that you are able to find enough information about this company in order to complete this assignment. You will create an appendix, in which you will insert related information.) Provide a rationale for the stock that you selected, indicating the significant economic, financial, and other factors that led you to consider this stock. Suggest the…
To effectively manage risk, the first step is to: Multiple Choice purchase liability insurance. create an emergency cash fund. establish prevention programs. eliminate all international risks. identify and eliminate all strategic risks. X
Professional financial planners should Multiple Choice A inform the client about the outcome of the plan. B assess their client's risk-and-return requirements on a one-time basis, explain the investment plan to the client, and inform the client about the outcome of the plan. C explain the investment plan to the client. D assess their client's risk-and-return requirements on a one-time basis. E explain the investment plan to the client and inform the client about the outcome of the plan.
Match with the best answer. /15 Insurance for Owners, Partners and Key Employees The loss of a key person can devastate your business and your livelihood. These types of insurance can help protect your business and your family from potential risks: 1. ____ Life insurance A. If you rely on certain key people to help run your business, you can take out key person insurance, so that your business will be protected in the event of the death of a key person. 2. ____ Disability insurance B. Provides you with a lump sum benefit, if you are diagnosed with a critical illness. 3. ____ Partnership insurance C. Will provide you with income for a specified period of time, if you are unable to work due to an injury or illness. 4. ____Critical illness insurance D. If your business partner passes away, partnership insurance will allow you to purchase the shares and continue running the business. 5. ____ Key person insurance E.…
In a furniture store evaluate its main sources of potential financial risk using suitable techniques. For each risk area you are required to recommend and justify appropriate action to reduce the exposure.
In his best seller Wealth Without Risk, Charles J. Givens, the self-styled expert on “low-risk ways to achieve and hold on to wealth,” offers the following advice as his strategy #32: “Buy disability insurance only if you are in poor health or accident prone.” What is your reaction to this “strategy?”
The probability distribution for damage claims paid by the Newton Automobile Insurance Company on collision insurance follows. Use the expected collision payment to determine the collision insurance premium that would enable the company to break even. The insurance company charges an annual rate of $520 for the collision coverage. What is the expected value of the collision policy for a policyholder? (Hint: It is the expected payments from the company minus the cost of coverage.) Why does the policyholder purchase a collision policy with this expected value?
You have two investments that have positive net present values and are financially feasible. Your boss wants you to make a recommendation on which one of the two to invest in given different useful lives? How do you account for this/make the decision?
Why do you think people have such a hard time with long-term goals like saving for retirement, getting life insurance or estate planning, yet see the need and importance for this type of think for small things?
For the next problem, I am going to explain a scenario and you need to state True OR False. You will then need a written rationale explaining your choice. Be sure to be specific in rationalizing your answer. You must use your own words. It is a good idea to provide a solved example to reinforce your point. To receive full credit, be sure to give a thorough explanation of why this statement is true or false (approximately 50 words). Michael decided that investing at a higher interest rate for 7 years is a better choice for his $7,500 investment (he got for his birthday). The company he chose offered 3.5% monthly, and the other company offered 3.425% continuously. Michael chose the better option! You will need to submit your work on this problem, giving a detailed explanation of WHY and how much more the better option will produce. O True O False
please answer in details as in why the option is correct and why others are wrong. please answer within 30 minites. its urgent.