+1-415-315-9853

info@mywordsolution.com

## Finance

 Basic Finance Corporate Finance Financial Management Financial Econometrics Portfolio Management Risk Management Public Finance Business Law & Ethics

Suppose that Kate and Anne enter into a pooling arrangement. Assume that both women have the following loss-distributions and that losses are independent.
\$50,000 with probability 0.005
\$20,000 with probability 0.01
Loss = \$10,000 with probability 0.02
\$ 0 with probability 0.965
a. prepare out the possible outcomes and the probability of each outcome for Kate and Anne after they enter into a pooling arrangement. That is, prepare out the probability distribution for each of the women after they enter into a pooling arrangement.
b. find out the expected loss to each person prior to and subsequent to entering into a pooling arrangement.
c. What happens to the standard deviation of the distribution of losses to each individual subsequent to the pooling arrangement?

Basic Finance, Finance

• Category:- Basic Finance
• Reference No.:- M926982

Have any Question?

## Related Questions in Basic Finance

### 1 what is the difference between the short position and the

1. What is the difference between the short position and the long position in a futures market? 2. Give an example of how someone might hedge using a commodity futures and give an example of how someone might hedge using ...

### Calculate the total lift force on the arctic hut shown

Calculate the total lift force on the Arctic hut shown below as a function of the location of the opening. The lift force results from the difference between the inside pressure and the outside pressure. Assume potential ...

### Assume that on 1 november the spot rate of the poundus was

Assume that, on 1 November, the spot rate of the £/US\$ was \$1.58 and the price on a December futures contract was \$1.59. Assume that the pound depreciates over November, so that by 30 November it is worth \$1.51. (a) What ...

### The past five monthly returns for pg company are 220

The past five monthly returns for PG Company are 2.20 percent, -3.4 percent, 5.20 percent, 4.7 percent, and 2.9 percent. What is the average monthly return?

### An article in the wall street journal discussing the nickel

An article in the Wall Street Journal discussing the nickel market contained the following: The sharp rise in nickel prices demonstrates how even a slight shift in demand and supply can roil tiny commodity markets like t ...

### Define a shear joint define an axial shear joint define

Define a shear joint? Define an axial shear joint? Define faying surface? Define friction-type joint? Define bearing-type joint? Draw a graph illustrating the way a shear joint fails? Is bolt preload important in a shear ...

### In november 2009 the government of north korea announced

In November 2009, the government of North Korea announced that it was replacing the existing currency with a new currency. The government would allow people to exchange only a limited amount of the old currency for the n ...

### Consider the following facts about hedge funds1 the share

Consider the following facts about hedge funds: 1. "[The] share of industry assets held by firms with more than \$1 billion under management has risen gradually from about 75 percent in 2006 to about 82 percent at the sta ...

### Finance assignmentcreate a 1050-word report and include the

Finance Assignment Create a 1,050-word report, and include the following: • Explain the relationship between risk and return • Identify an example of risk and return. • Explain which is more risky bonds or common stocks. ...

### Researchers are interested in determining if men and womens

Researchers are interested in determining if men and women's hearts tend to be different sizes. In a sample of 12 males, the mean diameter of the heart was 13.21 cm with a standard deviation of 1.05. Among 9 females, the ...

• 13,132 Experts

## 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.

### WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

### Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

### Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

### Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

### Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro