1. You purchase a one year U.S. Treasury bill with a face value of $10,000 at a price of $9,600 and hold it until maturity. Inflation over that year was measured at 3.0%. What was the real rate of interest that you earned?
2. Who is responsible for deciding how much reinsurance to purchase? How do these stakeholders affect the purchase of reinsurance?
3. How does an insurer’s financial strength affect its need for reinsurance?