An insurance policy has a deductible of 10,000, policy limit of 100,000, and a coinsurance factor of 80%. During the year, the insured suffers six losses of sizes: 3000, 8000, 14,000, 80,000, 120,000, and 200,000. (a) How much does the insurer pay in total? (b) What is the amount paid per loss (or the expected payment per loss)?

An insurance policy has a deductible of 10,000, policy limit of 100,000, and a coinsurance factor of 80%. During the year, the insured suffers six losses of sizes: 3000, 8000, 14,000, 80,000, 120,000, and 200,000. (a) How much does the insurer pay in total? (b) What is the amount paid per loss (or the expected payment per loss)?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 12P

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