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A restaurant decides to insure itself against the risk of fire

Questions and AnswersPosted On:2023-08-04 09:10:06Viewed:196

A restaurant decides to insure itself against the risk of fire.The insurance company estimates that the probability of a fire is 0.1% and the expected payment should a fire occur is $10 million.If the risk-free rate is 4%,the expected return on the market is 9%,and the beta of the risk is -3,what is the actuarially fair insurance premium?


A)$9,174
B)$9,524
C)$9,615
D)$9,009
E)$11,236


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Last updated on:2023-08-04 09:10:06

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