Explain purpose of insurance as risk management tool

Assignment Help Risk Management

Reference no: EM131865033

1. Explain the purpose of insurance as a risk management tool. In homeowners insurance, how is “loss of use” calculated? How might this information factor into decisions about the policy limits you should carry?

2. You paid $1,122 for a corporate bond that has a 11.90 percent coupon rate. What is the bond’s current yield? Round the answer to two decimal places

3. Black Hill Inc. sells $100 million worth of 27-year to maturity 10.81% annual coupon bonds. The net proceeds (proceeds after floatation costs) are $975 for each $1,000 bond. What is the before-tax cost of capital for this debt financing? Round the answer to two decimal places in percentage form.

Reference no: EM131865033

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