Farmville Industries Is a Major Agricultural Firm and Is Concerned

question 24

Essay

Farmville Industries is a major agricultural firm and is concerned about the possibility of drought impacting corn production.In the event of a drought,Farmville Industries anticipates a loss of $75 million.Suppose the likelihood of a drought is 10% per year,and the beta associated with such a loss is 0.4.If the risk-free interest rate is 5% and the expected return on the market is 10%,then what is the actuarially fair insurance premium?

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Definitions:

Big Five

A model outlining five broad dimensions of personality traits: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a comprehensive classification of mental disorders by the American Psychiatric Association.

Less Categorical

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Personality Disorders

Personality disorders are a class of mental disorders characterized by enduring maladaptive patterns of behavior, cognition, and inner experience, shown across many contexts and deviating from cultural norms.