An actuary is a person who assesses various forms of risk. Based on past data, the holder of an automobile insurance policy pays an insurance premium of $1200 and has a 5% chance of an accident causing $1000 of damage, a 2% chance of $5000 damage and a 1% chance of totaling the car worth $25,000. The probability of the insurance holder making through the year without any accidents is 92%. Find the expected value and interpret it. Is the insurance company likely to make or lose money with this type of policy in the long run

Answers

Answer 1

Answer:

With this policy throughout the long run, the insurance company will make money. A further explanation is provided below.

Explanation:

According to the given values in the question,

The expected value will be:

⇒ [tex]E(value) = Sum \ of \ (x\times P(x))[/tex]

By putting all the given values, we get

⇒                 [tex]=1000\times 0.05+5000\times 0.02+25000\times 0.01+0\times 0.92[/tex]

⇒                 [tex]=50+100+250+0[/tex]

⇒                 [tex]=400[/tex] ($)

As we can see that,

[tex]E(value)<premium[/tex]

[tex]400<1000[/tex]

Thus the above is the correct answer.


Related Questions

The "Danger Zone" is between what temperature range?

Answers

Answer:

41-135

Explanation:

Hello, there mate! The answer to this question is 41 - 135. In between these temperatures, bacteria flourishes the most. The ServSafe food guide states that the Danger Zone is 41 - 135 degrees, so you should not cook or store poultry or other foods in these temperatures. When you cook, it should be above 140, and when you freeze, it should be below 41. I hope I helped.

An economic transaction in which one party trades a good or service for another good or services is called barter. comparative advantage. absolute advantage. a production possibility.

Answers

Answer:

barter

Explanation:

Barter can be regarded as act of trading goods/services involving two or more parties whereby a party provide a goods/services in return for goo/service provided to him/her by another party. It involves system of exchange without using money which means no monetary medium involve. It should be noted that An economic transaction in which one party trades a good or service for another good or services is called barter

The Boston Consulting Group (BCG) has given specific names and descriptions to the four resulting quadrants in its growth-share matrix based on the amount of cash they generate for or require from the organization. Stars are SBUs that are classified as having

Answers

Answer:

Stars are companies that possibly have a huge growth potential. This potential comes from being in a market that is growing rapidly, but at the same time, the division or products has a significant market share. It is basically the best scenario since the market is growing, the company's market share is growing, and profits should also be growing.

what is human resources management?​

Answers

Answer:

Human resource management is the strategic approach to the effective and efficient management of people in a company or organization such that they help their business gain a competitive advantage. It is designed to maximize employee performance in service.

Barbara's Baskets Company expects to manufacture and sell 30,000 baskets in 2019 for $5 each. There are 4,000 baskets in beginning finished goods inventory with target ending inventory of 9,000 baskets. The company keeps no work-in-process inventory. What amount of sales revenue will be reported on the 2019 budgeted income statement

Answers

Answer:

Sales revenue= $150,000

Explanation:

Giving the following information:

Barbara's Baskets Company expects to manufacture and sell 30,000 baskets in 2019 for $5 each.

The sales revenue is calculated as follow:

Sales revenue= number of units sold*selling price per unit

Sales revenue= 30,000*5

Sales revenue= $150,000

The government uses taxes and subsidies to guide consumption and production decisions.

a. True
b. False

Answers

Answer: True

Explanation:

Tax is the amount of money that's paid by an individual or firm to the government. Subsidies are the funds or other forms of assistance that's given by the government to firms in order to help them increase their production and lower the prices of goods.

Fir example, if the government wants to decrease consumption in the economy, the government can increase tax. On the other hand, the government can increase consumption by reducing tax as people will have money to spend and also more money for production purpose.

Sheffield Corp. reported the following information for 2016: October November December Budgeted sales $1200000 $1120000 $1400000 All sales are on credit. Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much cash will Sheffield receive in November?

Answers

Answer: $1,160,000

Explanation:

The amount of cash that Sheffield will receive in November will be calculated as:

= (October budget sales × 50%) + (Novemeber budgeted sales × 50%)

= ($1200000 × 50%) + ($1120000 × 50%)

= $600,000 + $560,000

= $1,160,000

Sheffield will receive $1,160,000 in November.

In cost-volume-profit analysis, the unit contribution margin is: Group of answer choices Sales price per unit less unit total cost per unit. Sales price per unit less unit fixed cost per unit. Sales price per unit less total variable cost per unit. )Sales price per unit less cost of goods sold per unit. The same as the contribution margin ratio.

Answers

Answer:  Sales price per unit less total variable cost per unit.

Explanation:

Cost-volume-profit analysis works by dividing the expenses faced by a business in the production and/ or selling of goods into fixed and variable costs.

To calculate the contribution margin in such a scenario, the Total variable cost incurred per unit is deducted from the sales price per unit. From this figure, the fixed cost can then be subtracted to find the operating income per unit.

If one wants to find the breakeven volume, you can divide the Fixed assets by the Contribution margin.

impact of collusion in terms of output and price on consumers and producers​

Answers

Answer: See explanation

Explanation:

Collusion refers to the agreements among the sellers of a particular product to either fix or increase the price and also reduce output. The main idea behind this is to increase profits and also reduce the competitiveness in such market.

Collusion can bring about high prices for the consumers and this ultimately leads to the reduction in the consumer surplus. Also, the new firms that want to enter the market may discouraged since the collusion can be an entry barrier.

whistle works manufacturers safety whistle keychains. They have the following information available to prepare their master budget whistle works sells eafch whistle for $12. It takes .25 direct labor hours to produce each whistle at a cost of $15 per hour. How much will direct labor cost be in December

Answers

Answer:

See below

Explanation:

The above information is incomplete. However, similar question will be used.

Name four commercial services which are useful to the manufacturer​

Answers

Answer:

hu

Explanation:

giyughhyyfrfjjtvvhi

Select the behavior that does NOT represent an example of a speaker effectively preparing for a lecture.

a. John types up a copy of his speech in case he has an unexpected moment of stage fright.
b. Eva memorizes her entire speech because she wants to avoid the rigidity of reading off of a piece of paper.
c. Matt has anxiety about giving his speech, so he works on his linguistics homework to distract himself.
d. Molly records herself giving her speech and plays it back to be sure that she is speaking clearly.

Answers

Answer:

c. Matt has anxiety about giving his speech, so he works on his linguistics homework to distract himself.

Explanation:

The behavior that represent the examples with respect to the speaker effectively preparing for the lecture are as follows:

a. The john types a copy of his speech where there is non expected moment comes

b. Eva remember her total speech as she want to neglect the rigidity

c, The molly records her speech and she plays it back so to be sure that she speaks clearly or not

So as per the given situation, the option c should be considered

Vaughn Manufacturing incurred the following costs for 84000 units: Variable costs $504000 Fixed costs 392000 Vaughn has received a special order from a foreign company for 2500 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $4500 for shipping. If Vaughn wants to earn $5000 on the order, what should the unit price be?

Answers

Answer: $9.80

Explanation:

The unit price to earn $5000 on the order will be calculated thus:

The variable costs for 2500 units will be:

= 504000/84000 × 2500

= 15000

The unit price will now be:

= (15000+4500+5000) / 2500

= 24500 / 2500

= $9.80

The unit price is $9.80

Pestro manufactures a herbicide that is used in the parks in Metroville. After the parks were sprayed with the herbicide, a group of children became ill and required hospitalization. Two dogs that were also in the park that day died. The parents of the children and the dog owners could:____.
a. not bring suit against the city.
b. only bring suit against the city.
c. not bring suit against Pestro because of a lack of privity.
d. bring suit against Pestro under Section 402A even though there is no privity.

Answers

Answer:

d. bring suit against Pestro under Section 402A even though there is no privity.

Explanation:

Section 402A enforces strict liability for physical harm that is caused a by the product sold to a buyer by a seller.

It states that if a seller sells a defective product that is unreasonably dangerous to an end user, the seller will be liable for any physical harm that results from its use.

Privity is when a contractual relationship exists between different parties in a transaction.

In the given scenario even without a privity the parents of the children and the dogs can bring suit against Pestro under Section 402A even though there is no privity.

They don't have to have a direct contractual relationship with Pestro.

Combining Supply and Demand
Scenario: The following shows a demand and supply schedule listing CDs demanded and supplied in the
millions) per week at each price. Graph each the following demand/supply schedules on one demand graph
and then answer the questions below:.
$6
Shortage/
Surplus
(Qs - Qd)
$5
$4
Price Per Quantity Quantity
Compact Demanded Supplied
Disc (Qd) (Qs)
$6
o
9
$5
2
6
$4
3
5
$3
4
4
$2
6
3
$1
9
0
$3
$2
$1
1
2 3 4 5 6 7 8
9 10 11 12 13 14

Answers

Answer:

the answer is $3

Explanation:

One of the advantages of work group cohesiveness is: the absence of conflict with other work groups formalized group norms reduced employee turnover the absence of resistance to change groupthink

Answers

Answer:

reduced employee turnover

Explanation:

Group cohesiveness occurs at the time when the bonds between the social group members to one another or the overall group are linked with each other. It can be in social relations, emotions, task relations, etc forms

Its advantage is that it decreased the turnover of the employees .Here the objective to accomplish the goal as a group rather than an individual

Therefore the above represent the answer

An issue of common stock currently sells for $52 per share, has an expected annual dividend to be paid at the end of the year of $0.90 per share, and has an expected growth rate to infinity of 5% per year. The expected rate of return on this security is:______

Answers

Answer: 6.73%

Explanation:

The expected rate of return will be calculated by using the formula:

Po= D1 / ( Ke – g )

Where,

Po = Current Price of the stock = $52

D1 = Expected dividend = $0.90

Ke = Expected rate of Return

g = Expected growth rate = 5% = 0.05

We'll then slot in the values into the equation. Therefore,

52.00 = 0.90 / (Ke – 0.05 )

(Ke – 0.05 ) = 0.90 / 52.00

(Ke – 0.05 ) = 0.01731

Ke = 0.05 + 0.01731

Ke = 0.06731

Ke = 6.73%

Therefore, the expected rate of return on this security is 6.73%.

Mesa County contracts with New Construct Inc. to build a courthouse. New Construct hires Odell to excavate the site. Odell’s work damages adjacent properties. Mesa files a suit against the excavator, who argues that the county is not named in his contract with New Construct. Most likely, the court will hold that Odell is:_________

a. not liable because Mesa is not named in Odell’s contract.
b. liable on the ground that Mesa is an incidental third-party beneficiary.
c. liable on the ground that Mesa is an intended third-party beneficiary.
d. not liable because Odell’s contract was with New Construct, not Mesa.

Answers

Answer:

c. liable on the ground that Mesa is an intended third-party beneficiary

Explanation:

             In a contract, the third-party beneficiary is a business or a person that benefits from the agreement and the terms of the contract that is made between the two other parties. According to law,  third-party beneficiary have certain rights which they can enforced if the contract is not fulfilled.

            In the context, Mesa is a third party beneficiary. The Mesa County enters into a contract with New Construct Inc. to construct a court house. Now New Construct Inc. again hires the firm Odell to excavate the land site.

            While excavating Odell damages few nearby properties, so Mesa County files a law suit against Odell. But Odell argues that Odell is not in agreement with Mesa County or have not entered into with any contract with the County, so Mesa cannot sue the excavator.

            But the court hold that as Mesa County is the third party beneficiary of the contract and have certain rights, Odell is held liable for the loss and should compensate for the loss to the County.

Straight-Line: Amortization of bond discount LO P2 Skip to question [The following information applies to the questions displayed below.] Legacy issues $640,000 of 8.5%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $570,443 when the market rate is 12%. Problem 14-4A
Required:
1. Prepare the January 1 journal entry to record the bonds' issuance
2. determine the total bond interest expense to be recognized over the bonds' life.

Answers

Answer:

Legacy

1. Journal Entry:

January 1:

Debit Cash $570,443

Debit Bonds Discount $69,557

Credit Bonds Payable $640,000

To record the issuance of the bonds at a discount.

2. Total bond interest expense to be recognized over the bonds' life:

= $287,160

Explanation:

a) Data and Calculations:

January 1, 2019

Face value of bonds issued = $640,000

Price of bonds =                       $570,443

Bonds discount =                      $69,557 ($640,000 - $570,443)

Coupon interest rate = 8.5%

Market interest rate = 12%

Maturity period = 4 years

Interest payment = semiannual on June 30 and December 31

With straight-line amortization of bonds discount, the semiannual amortization will be = $8,695

Semi-annual interest payment = $27,200 ($640,000 * 4.25%)

Semi-annual interest expense = $35,895 ($27,200 + $8,695)

Annual interest expense = $71,790

1. Transaction Analysis

January 1:

Cash $570,443 Bonds Discount $69,557 Bonds Payable $640,000

2. Total bond interest expense to be recognized over the bonds' life:

= $287,160 ($71,790 * 4) or ($35,895 * 8)

Drag each tile to the correct box.
Match each type of social media to its description.
allows users to provide short
updates to followers
connects individuals with common
relationships or interests
creates a space for individuals to
share knowledge on a specific topic
social network
arrowRight
discussion forum
arrowRight
microblogging
arrowRight
Reset Next

Answers

Answer:

1. Microblogging.

2. Social network.

3. Discussion forum.

Explanation:

1. Microblogging: it is an online platform or web resource designed and developed to avail end users with the opportunity to provide short updates to followers. One of the most commonly used microblogging platform in the world is Twi-tter. Others include Tumblr, Pinterest, WordPress, blog etc.

2. Social network: it is a software application, online platform or web resource designed and developed to connect individuals with common relationships or share similar interests. Face-book is one of the most widely used social network in the world today. Other social network include You-Tube, Hangout, Insta-gram, etc.

3. Discussion forum: it is an online platform or software application designed and developed to create a space for various individuals, especially registered members to share knowledge on a specific topic ranging from sports, education, comedy, movies, jobs, politics, romance, crime, books, food, etc. Some examples of discussion forum are Reddit, nairaland, etc.

Answer:

social network - connects individuals

discussion forum - creates a space

microblogging - allows users

plato

On December 31, 2020, Dow Steel Corporation had 610,000 shares of common stock and 31,000 shares of 9%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $410,000 and $70,000 to common and preferred shareholders, respectively, on December 15, 2021. On February 28, 2021, Dow sold 63,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2021, was $2,150,000. The income tax rate is 25%.
Required:
Compute Dow's earnings per share for the year ended December 31, 2021.

Answers

Answer:

$3.02 per share

Explanation:

The computation of the earning per share is shown below:

we know that

Earnings per share = (Net income - preferred dividend) ÷  Weighted average outstanding common shares

= ($2,150,000 - $70,000) ÷ 688,000 shares

= $3.02 per share

Date                 Particulars           No. of shares

01/01-31/12 610000 ×  12 ÷ 12 (610000 × 1.04)  $634,400

28/02-31/12    63000 × 10 ÷ 12 (52500 × 1.04)   $54,600

01/07-31/12     (2000) ×  6 ÷ 12          -$1,000

Weighted average outstanding common shares 688,000

You are offered the following investments: You can invest $500 today and receive $600 in 5 years. The investment is low risk. You can invest the $500 in a bank account paying 4%. What is the implied interest rate for the first choice, and which investment should you choose

Answers

Answer:

500

Explanation:

a project has a beta of 1/07, the risk free rate is 2.1% and the market risk premium is 8.4% the projected expected rate o return is

Answers

Answer:

11.09%

Explanation:

Correct word is "a project has a beta of 1.07, the risk free rate is 2.1% and the market risk premium is 8.4%.The project expected rate of return is?"

As per CAPM, Expected rate of return = Risk free rate + (Beta*Market risk premium)

Expected rate of return = 2.1% + (1.07*8.4%)

Expected rate of return = 2.1% + 8.99%

Expected rate of return = 11.09%

So, the project expected rate of return is 11.09%.

Deazia is the sole proprietor of Baldwin Hair Salon that reported net income of $44,000 for the year. During the year she withdrew $20,000 from the business for personal use. How much income from the above must Deazia include in her gross income for the year

Answers

Answer:

$44,000

Explanation:

Based on the given information we were told that the sole proprietor reported NET INCOME of the amount of $44,000 for the year which means that the amount of income from the above that Deazia must include in her GROSS INCOME for the year will be the reported NET INCOME amount of $44,000.

During February, $75,150 was paid to creditors on account, and purchases on account were $96,190. Assuming the February 28 balance of Accounts Payable was $32,310, determine the account balance on February 1.

Answers

Answer:

$45,000

Explanation:

Given the above information, the account balance on February 1 is computed below;

Balance of account payable Feb 28 + Cash paid to creditors in February - Purchases on account

= $59,900 + $186,500 - $201,400

= $45,000

Therefore, the account balance on February 1 is $45,000

Suppose that you are conducting market research at a regional mall in your city. The survey you are administering contains some relatively personal questions that some consumers might be reluctant to answer. As a result, you decide to select passers-by whom you believe are most likely to agree to answer your questions. Such an approach helps to ensure that all surveys will be completed and that questions will be answered in an unbiased manner. Nonetheless, it may come with a cost. Of the following statements, which is not a potential problem associated with this approach?

a. It might unexpectedly impact the "representativeness" of the sample.
b. All the answer options are potential problems.
c. It is likely to decrease the response rate.
d. It violates the underlying principles inherent in "probability sampling" techniques.
e. It could negatively influence the validity of the research study.

Answers

Answer: b. All the answer options are potential problems.

Explanation:

In other to get a truly unbiased result from surveys, the sample chosen should be completely random. This method is not random as the people being chosen are selected which means that the basic underlying principle of probability sampling of randomness is violated.

The representativeness of the sample might also be affected if only a certain type of people look like they will answer which means that only they will be represented in the sample. These problems have a strong chance of influencing the research in a negative way as the research may be biased.

And of course the response rate will likely be lower as only a certain type of people are being looked for and they might not number much.

Vaughn Company has the following equivalent units for July: materials 15340 and conversion 17700. Production cost data are: Materials Conversion Work in process, July 1 $ 8700 $ 3100 Costs added in July 68000 50000 The unit production costs for July are: Materials Conversion Costs

Answers

Answer:

Vaughn Company

The unit production costs for July are:

                                     Materials  Conversion

Cost per equivalent unit   $5             $3

Explanation:

a) Data and Calculations:

                                        Materials     Conversion

Beginning WIP                 $ 8,700          $ 3,100

Costs added in July         68,000          50,000

Total production costs   $76,700        $53,100

Equivalent units for July   15,340           17,700

Cost per equivalent unit   $5                 $3

b) The materials and conversion costs per equivalent unit are the dividends resulting from the division of the total production costs for materials and conversion by their respective total equivalent units of production.

Determine the internal rate of return for a project that costs $177,000 and would yield after-tax cash flows of $21,000 per year for the first 5 years, $29,000 per year for the next 5 years, and $42,000 per year for the following 5 years.

Answers

Answer:

12.60 %

Explanation:

Using the CF function of a financial calculator the  internal rate of return will be calculated as follows :

- $177,000 CF 0

$21,000 CF 1

5 shift Nj

$29,000 CF 2

5 shift Nj

$42,000 CF 3

5 shift Nj

Then

Shift IRR = 12.60 %

therefore,

the internal rate of return for a project is 12.60 %

Explain how mixed costs are related to both fixed and variable costs. A. Mixed costs have a fixed portion that is a cost per unit of cost driver activity. Mixed costs also have a variable portion that is usually a cost per time period. B. Mixed costs are the sum of the fixed and variable costs that are related to equipment costs. These mixed costs are a form of committed costs during the production phase. C. A mixed cost is the sum of fixed costs and the portion of variable costs that are related to salaries and wages. These mixed costs are discretionary costs that easily fluctuate and must therefore be kept separate during a production phase. D. A mixed cost has a fixed portion that is usually a cost per time period. A mixed cost also has a variable portion that is a cost per unit of cost driver activity.

Answers

Answer:

D. A mixed cost has a fixed portion that is usually a cost per time period. A mixed cost also has a variable portion that is a cost per unit of cost driver activity.

Explanation:

As we know that

The variable cost is the cost that can change when the level of production increase or decrease

The fixed cost is the cost that remains fixed whether the production level increased or not

ANd, the mixed cost includes some part of the variable cost and some part of the fixed cost

So as per the given options, the option D is correct as the mixed cost involved the fixed portion that could be cost per the time. And, it involved the variable portion i.e cost per unit with respect to the cost driver activity

Capital budgeting is the process of analyzing: Group of answer choices Cash outflows only. Investments with certain outcomes only. Short-term investments. Operating revenues. Long-term investments.

Answers

Answer:

Long-term investments.

Explanation:

Capital budgeting can be regarded as process that is been utilized by business in determining the type proposed fixed asset purchases that need to be declined or should be accepted. This process helps in creating quantitative view as regards the proposed fixed asset investment, so that rational basis to make make a judgment can be surfaced. It should be noted that Capital budgeting is the process of analyzing Long-term investments.

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