User Account

All Pages

Different kinds of policies

Assignment Help Business Management
Reference no: EM131217549

Suppose a society contains two individuals. Joe, who smokes, and Tanya, who does not. They each have the same utility function U(C)=ln(C). If they are healthy, they will each get to consume their income of $15,000. If they need medical attention, they will have to spend $10,000, leaving them $5,000 for conumption. Smokers have a 12% chance of needing medical attention, and nonsmokers have a 2%chance.

An insurance company is willing to insure Joe and Tanya. The twist here is that the insurance company offers two different kinds of policies. One policy is called the "low deductible," (L) for which theinsurance company will pay any medical costs over $3,000. The other is a "high deductible," (H) for which the insurance company will pay any medical costs over $8000.

How do I take into account these deductibles when calculating the actuarially fair premium for example? How is the setup?

Reference no: EM131217549

Questions Cloud

Benefits to society than the cost of running the system : "The system of public education generates greater benefits to society than the cost of running the system" is a normative statement.
Determine the value or k that will cause sustained constant : Determine the value or K that will cause sustained constant-amplitude oscillations in the system. Determine the frequency of oscillation.
How important should changes in roe be in the decision : How important should changes in ROE be in this decision? What would be the immediate impact (increase, decrease, or no effect) of the following transactions on (i) ROE, (ii) ROIC, and (iii) the Current Ratio for Anchor Corp?
Nominal compensation into current year : 1. Convert each nominal compensation into current year dollars and rank them (by year) from lowest to highest. 2. Determine how much the lowest compensated year from part "a" would have to have made in that year to equal the purchasing power of the..
Different kinds of policies : An insurance company is willing to insure Joe and Tanya. The twist here is that the insurance company offers two different kinds of policies. One policy is called the "low deductible," (L) for which theinsurance company will pay any medical cost..
How they will affect the effectiveness of unions : In a 1 - 2 page paper, identify a minimum of three of the most important goals of union ethics training. In your paper, explain why these goals are important and how they will affect the effectiveness of unions. Ensure that your paper is in APA fo..
Explanation for the decrease in population growth : The rate of population growth in US has been declining in the past three decades. This period also coincides with increased labor force participation by women. Provide an economic explanation for the decrease in population growth.
Allowance method versus direct write-off method : Allowance Method versus Direct Write-Off Method On March 10, Gardner, Inc., declared a $700 account receivable from the Gates Company as uncollectible and wrote off the account. On November 18, Gardner received a $200 payment on the account from Gate..
Half of the average of the numbers : A total of 10 players are each choosing a number from (0,1,2,3,4,5,6,7,8). If a player's number equals exactly half of the average of the numbers submitted by the other nine players, then she is paid $100; otherwise, she is paid 0. Solve for the s..

Reviews

Write a Review

Business Management Questions & Answers

  What constitutes ethical behavior in business

Q1. - What constitutes ethical behavior in business? Unethical behavior? Q2. - How can having a "code of ethics" can help to create an ethical environment?

  With organizational development as well as affirmative

With organizational development as well as affirmative action have you seen either program in action and if thus you can comment about what you saw

  Role of perception in the decision making process

How can a person's perception of others impact an organizations behavior and what are the positive and negative effects of using perceptive shortcuts when judging others

  Newton laws explaining motion

In this module, you have learned the terms used to describe motion (e.g,. distance, speed, acceleration) as well as Newton's laws explaining motion. Describe at least two ways the material you have learned in this unit applies to driving a car.

  While the gasoline yield from one barrel of crude depends on

The Low Knock Oil Company produces two grades of cut-rate gasoline for industrial distribution. The grades, regular and economy, are produced by refining a blend of two types of crude oil, type X100 and type X220. Each crude oil differs not only in c..

  Supervisor conductors referred to francisco as taco

She is presented with the offer on June 9, 1997, and told she has until June 13 to accept the offer and sign the waiver. She signs the waiver on June 11 and later wishes to bring an ADEA claim based on some aspect of the early retirement plan.

  What examples of functional or dysfunctional conflict

What examples of functional or dysfunctional conflict have you observed in organizations lately? What was the outcomes? What caused the dysfunctional conflict?

  Product strategy development for pepsico

Discuss the product strategy development for PepsiCo

  Roles of staff industrialorganizational psychologistswhat

roles of staff industrialorganizational psychologistswhat is industrialorganizational psychology? how is it different

  Psychological inspection claiming that the test desecrated

A research specialist for the Indiana Department of Corrections was told that she would have to submit to a psychological inspection in order to keep her job

  Using organisational behaviour theories and concepts

Using Organisational Behaviour theories and concepts, critically evaluate the above statement.

  Demonstrate understanding of the capital process

Demonstrate your knowledge of the concepts that go in to the preparation of a budget - Apply your knowledge of working capital, and tie one of your improvements in this case to a capital purchase

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd