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Why does the assumption of independence of risks matter in the exs of insurance? what would happen to premiums if the probabilities of house burning were postively correlated? Can you think of a situation where they might be negatively correlated?
Microeconomics, Economics
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Question: A treasury bond pays 9% coupon p.a. On June 12, the bond has 63 days to the next coupon payment and there are 297 days since the last coupon payment (assume that there are 360 days in a year). Since the last co ...
Question: In some industries, merger agreements stipulate that a high-ranking executive of one company will be president or chairman of the board of the merged company for a certain period of time, say four years, after ...
Question: You were recently hired to replace the manager of the Roller Division at a major conveyor manufacturing firm, despite the managers strong external sales record. Roller manufacturing is relatively simple, requir ...
Question: The demand for imported Honda automobiles is given by the following equation: Q H = 1200 - 20P H + 10P C + 200P G The price of Hondas, P H = 60, the price of Chevrolets, P C = 70, and the price of gasoli ...
Question: After years of smoldering unrest in southern Mexico, the rebels finally mount a full-scale attack on urban areas. Order is eventually restored, but in the meantime capital has fled the country, resulting in a 5 ...
Question: Draft a one-page spreadsheet showing financial history and projected performance for the company: 'Nordstrom'. The rows should include revenue, expenses, calculated profit, and calculated profit margin. The col ...
Question: In the Heckscher-Ohlin model studied in the slides, suppose that K L = K* L* but preferences may be different between countries. Suppose that the home country has comparative advantages in food. In what country ...
Question: Developing a new product has taken longer and required more work than was expected at the time the decision to develop was first made. Should the firm raise the price of the product above what it originally pla ...
Question: What are the six most important provisions of GATT? What are relative merits of those provisions? What the extension of GATT to World Trade Organization WTO involves? How do you relate WTO to Globalization? The ...
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