Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

Part A:

problem 1:

a) Show that the nominal rate of interest convertible once in every 4-year is to a nominal rate of discount convertible quarterly.

b) John buys a 10-year bond, of face and redemption amount, x, with 10 percent annual coupons at a price to yield 10 percent effective annual rate. The coupons, when received are reinvested immediately at 8 percent effective annual rate. Instantly after the receipt (and reinvestment) of the 4th coupon John sells the bond to Smith for a price that will yield effective annual rate i to the buyer. The yield rate that John earns on his investment is 8 percent effective annual value of i.

problem 2:

a) Discuss the Bayesian approach to credibility theory

b) Let X1 be the outcome of a single trial and let E (X2 X1) be the expected value of the outcome of a second trial. You are given the information:

1270_bayesian approach.jpg

Find out the Bayesian estimate for:

E [X2 |X1 = 16].

Part B:

problem 3: What is the basic principle of equivalence employed in insurance? Do you think some modifications have come up recently in applying that principle due to inclusion of financial valuation practices? Provide reasons in support of your answer.

problem 4: Describe how the valuation in financial markets has influenced the valuation in insurance market. Do you think this influence has changed the principle of equivalence used in insurance problems?

problem 5: Describe the concept of ruin probability.

problem 6: Consider a binomial market model and discuss how a market in this formulation admits an arbitrage opportunity. As well, propose a trading strategy that describes the arbitrage.

problem 7: prepare Short notes on:

i) Black-Scholes Theorem. 
ii) Panjer Recursion. 
iii) Reinsurance Pricing. 
iv) Insurance Regulation.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M92115

Have any Question? 


Related Questions in Microeconomics

Hospitality economic reportformat individual report limited

Hospitality Economic Report Format: individual report, limited to 1500 words - use them wisely! The task is to produce a concise yet critical report, provide recommendations and recognise limitations of what you are reco ...

Topic 1 costs and economies of scaleyou have learned a good

Topic 1: Costs and Economies of Scale You have learned a good deal about production costs and profit in this unit. You have also learned that accountants and economists calculate profit differently. Moreover, many suppli ...

Recall from lecture the two facts we discussed one no

Recall from lecture the two facts" we discussed: One, no product exists at a vacuum; and two relationships among products change over time. Recall the background factors of demand: consumer preferences/ Wants; consumer i ...

Assignment 2 operations decisiondetermine the market

Assignment 2: Operations Decision Determine the market structure in which the low-calorie frozen, microwavable food company operates. Use the Internet to research two of the leading competitors in the low-calorie frozen, ...

Question - determined that the cost of supplies on hand was

Question - Determined that the cost of supplies on hand was Tk. 1500 and Tk. 1200 of supplies had been used during the month.

Key informationusing the readings supplied critically argue

KEY INFORMATION Using the readings supplied, critically argue in support of a single one of the following interventions to improve housing affordability: 1. Restricting credit to acquire property (e.g. tax added to mortg ...

Case studyprojectthere is a single case project worth 10 of

Case Study/Project There is a single case project worth 10% of your total grade. This is due on Sunday of week 6 at midnight EST. Select a news article dated within the previous two months, and analyzes the issue using t ...

Cost-benefit analysisi measuring benefits from projects

Cost-Benefit Analysis I. Measuring Benefits From Projects That Reduce Private Good Costs Of Production (No distortions.)The inverse demand function for a good is given by: P = 30 -Q/3. Assume that the initial supply curv ...

Assignmentchoose an ethical issue to write about you may

Assignment Choose an ethical issue to write about. You may choose from the list below, or, with approval from the instructor, select a different socially relevant topic. It is recommended that you choose a topic that you ...

Assignment market formsfor this assignment you will do a

Assignment: Market Forms For this assignment you will do a significant portion of work in MS Excel and import it into an MS Word document for submission. You will use the data below to address Price and Output decisions ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate