Fair Insurance

question 65

Multiple Choice

Fair insurance

• A)has an expected value for the policy holder of zero.
• B)has a positive expected value for the insurance company.
• C)has very high insurance premiums.
• D)is available only to those who fully insure.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed.

Income Earned

The total amount of money received by an individual or entity as a result of employment, investments, or other sources over a certain period.

Capital Stock

The total amount of physical and financial assets owned by a company, including buildings, machinery, and equity investments.

Interest Income

Income earned through the lending of money or from deposit funds in bank accounts and other financial instruments.