Corporate Finance
12th Edition
ISBN: 9781259918940
Author: Ross, Stephen A.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 23, Problem 9CQ
Insurance as an Option Insurance, whether purchased by a corporation or an individual, is in essence an option. What type of option is an insurance policy?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
How will you relate and apply the derivatives instrument to an insurance policy?
2) Explain why offer and acceptance is essential to the formation of a binding insurance contract?
An implied condition of pooling risks with insurance is that the event being insured against is under the control of the individuals. TRUE or FALSE
Strictly speaking, the price of insurance is the pure or actuarily fair premium TRUE or FALSE
Chapter 23 Solutions
Corporate Finance
Ch. 23 - Employee Stock Options Why do companies issue...Ch. 23 - Real Options What are the two options that many...Ch. 23 - Project Analysis Why does a strict NPV calculation...Ch. 23 - Real Options Utility companies often face a...Ch. 23 - Prob. 5CQCh. 23 - Real Options Star Mining buys a gold mine, but the...Ch. 23 - Real Options You are discussing real options with...Ch. 23 - Real Options and Capital Budgeting Your company...Ch. 23 - Insurance as an Option Insurance, whether...Ch. 23 - Real Options How would the analysis of real...
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
- Which of the following types of insurance does NOT involve a contract with an external party? a. self insurance b. directors and officers insurance c. property insurance d. life insurancearrow_forwardHow do insurance companies calculate their premiums?arrow_forwarddescribing how the element of "risk" factors into the concept of insurance. cite a specific type of insurance policy and indicate how risk will play into the issuance of the insurance policy.arrow_forward
- What levels and kinds of risks are properly and mosteconomically passed on to insurance carriers?arrow_forwardDescribe a private insurance. what is it? Discuss the primary strengths and advantages, and weaknesses and disadvantages of the plan. how appealing is the plan to consumers? is it appealing to consumers?arrow_forwardwhat is the Difference between derivatives and insurance contractarrow_forward
- What is pre-paid insurance, and how does it work?arrow_forwardWhat are the benefits of having third-party insurance?arrow_forwardChoose the best answer. 1.Which statement is TRUE about an insurance contract? * a.The insurer is the party that has an obligation under an insurance contract to compensate a policyholder if an insured event occurs. b.The policyholder is the party that has a right to compensation under an insurance contract if an insured event occurs. c.The insured event is an uncertain future event that is covered by an insurance contract and creates insurance risk. d.All of these statements are true about an insurance contract. 2. IFRS 17 provides that insurance contracts should * a.Comply with all existing IFRS b.Generally continue to be subject to existing accounting policies. c.Comply with the IFRS Framework document. d.Be covered by IAS 32 and IFRS 9 3.An insurance contract can contain both deposit and insurance elements. An example might be a reinsurance contract where the cedant receives a repayment of the premiums at a future date if there are no claims under the contract. Effectively this…arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Pfin (with Mindtap, 1 Term Printed Access Card) (...
Finance
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning
Investment Risk and Its Types; Author: EconClips;https://www.youtube.com/watch?v=qDZw_iKzJlI;License: Standard Youtube License