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Why does the assumption of independence of risks matter in exs of insuraces? what would happen to premiunms if the probabilities of houses burning were positively correlated? Can you think of a situation where they might be negatively correlated?
Microeconomics, Economics
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Question: Southern California Edison's prices, service quality, and investments in new facilities are pervasively regulated by governments under long-standing rules. Do you expect that a given decision will be made at a ...
Question: The current interest rate on one year's Indian rupee deposit is 5% and yen deposit is 12%. The current yen/rupee exchange rate is 2 and after a year, it is expected to exceed 2.4. In this case, what currency wo ...
Question: What is the Lucas critique? What are rational expectations and how do they relate to the Lucas critique? What does it suggest might be a problem with activist and discretionary policy? The response must be type ...
Question: Savers are taxed on the nominal interest payments they receive rather than the real interest payments. Suppose the federal government shifts from taxing nominal interest payments to taxing only real interest pa ...
Question: During a particular year a corporation has 12.1 million in revenue, 2.2 million of operating expenses, and depreciation expenses of 4.1 million. Using the corporate federal tax rates provided, what is the appro ...
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Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate
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