Why assumption of independence of risks matters in insurance, Microeconomics

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Why assumption of independence of risks matters in insurance

Why does the assumption of independence of risks matter in the examples of insurance? What would happen to premiums if the probabilities of houses burning were positively correlated? Can you think of a situation where they might be negatively correlated?

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Microeconomics: Why assumption of independence of risks matters in insurance

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Microeconomics: Why assumption of independence of risks matters in insurance

Reference No:- TGS052550

Have a Question? (oR Write a Review)

Recent Questions Asked Microeconomics

Q : Capitalized due to the requirement of fasb

Q : What was the depletion charge per ton

Q : Conversion factor for a bond maturing

Q : Make the journal entry to record the interest

Q : Why assumption of independence of risks matters in insurance

Q : Marginal tax rates-expected rate of return

Q : What are the federal income tax consequences

Q : What is the profit maximizing level of advertising

Q : Total carrying cost and the restocking cost

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Request for Solution File

Ask an Expert for Answer!!

Microeconomics: Why assumption of independence of risks matters in insurance

Reference No:- TGS052550

Recent Questions Asked Microeconomics

Q : Capitalized due to the requirement of fasb

Q : What was the depletion charge per ton

Q : Conversion factor for a bond maturing

Q : Make the journal entry to record the interest

Q : Why assumption of independence of risks matters in insurance

Q : Marginal tax rates-expected rate of return

Q : What are the federal income tax consequences

Q : What is the profit maximizing level of advertising

Q : Total carrying cost and the restocking cost

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