People in a certain group have a 0.3% chance of dying this year
If a person in this group buys a life insurance policy for $3,300 that pays $1,000,000 to her family if she dies this year and $0 otherwise, what is the expected value of a policy to the insurance company? A) $0
B) $300
C) $3,000
D) $3,300
B
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You are the owner of a rare bottle of wine valued at $332. There are no costs associated with storing or selling the wine. Next year you expect the wine to increase in value to $350. If the interest rate is 10 percent
A) you should sell the wine today. B) you should keep the wine for at least one more year. C) you are indifferent between selling the wine today and holding it for one more year. D) more information is needed to answer this question.
The demand for dollars is downward sloping because when dollar value rises,
a. Foreigners demand more of US goods and services b. Foreigners demand less of US goods and services c. Foreigners demand more dollars d. It does not depend on the dollar value
If the earnings report of a firm indicates higher earnings than was expected by the investors:
a. the stock prices of the firm will decline. b. the price of the product produced by this firm will decline. c. the price of the product produced by this firm will rise. d. the firm will spend more on advertising. e. the stock prices of this firm will increase.
Each citizen in a small town suffers 5 units of irritation for each bushel of leaves burned in the town. The charge for hauling a bushel of leaves to the land fill is a fee equal to 20 units of irritation. There are 25 people in the town, each of whom minimizes personal irritation and has 10 bushels of leaves. If each person pursues their own self-interest, how much irritation will each person in the town experience from burning leaves each fall?
What will be an ideal response?