Question

In: Finance

a) Indicate whether each of the following guarantees is considered insurance. Explain your answer. i) A...

a) Indicate whether each of the following guarantees is considered insurance. Explain your answer.

i) A television set is guaranteed by the manufacturer against defects for 90 days.

ii) A large group of homeowners agrees to pay for losses to homes that burn during the year because of fire.

iii) I bet the insurance company $300 against $100,000 that my house will burn.

Solutions

Expert Solution

1. This is a sort of warranty not insurance as manufacturer is providing for repairs as an additional service not exchanged with payment of premium.

2.This is making up for the losses without payment of a premium so this is also not an insurance.

3. This is a type of fire insurance where you are paying $ 300 as a premium to get reimbursed $100000 , if your house burns.

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Indicate whether each of the following statements is true, false, or uncertain, and explain your answer...
Indicate whether each of the following statements is true, false, or uncertain, and explain your answer in great detail. If a word or phrase is italicized and bolded your answer must include a concise definition of the word or phrase. You must include graphs when necessary. How does an economy get out of a recessionary gap? (use a graph.)
Indicate whether each of the following statements are true, false, or uncertain and explain your answer....
Indicate whether each of the following statements are true, false, or uncertain and explain your answer. a. Consider two zero-coupon bonds, one with a short maturity, and one with a longer maturity. The value of the long-maturity bond is more sensitive (in % terms) to changes in interest rates than the short-maturity bond' s value. b. If the Internal Rate of Return (IRR) of an investment project is above its cost of capital, then the NPV of the project (calculated...
Indicate whether the following statements are true or false. Provide an explanation for your answer: i....
Indicate whether the following statements are true or false. Provide an explanation for your answer: i. In a perfectly competitive market an increase in demand for a product may increase prices in the short run but not in the long run. ii. The "invisible hand" is a metaphor for how societies create laws to regulate what and how things are produced in an economy. iii. The opportunity cost of an item or an action is always equal to the amount...
Indicate whether the following statements are TRUE or FALSE and explain your answer fully with an...
Indicate whether the following statements are TRUE or FALSE and explain your answer fully with an adequate explanation a)An efficient outcome is desirable because it allows us to make Pareto improvements. b)Unlike a consumer, a firm does not face a budget constraint. c)If the wage rate increases, then those who work have a stronger incentive to supply labor.
Indicate whether each of the following statements is True or False, and Briefly Justify your answer....
Indicate whether each of the following statements is True or False, and Briefly Justify your answer. The Coefficient of Determination in a multiple linear regression model, R2, is the ratio of residual sum of squares (RSS) to total sum of squares (TSS). It tells us the percentage of unexplained variation in the dependent variable.
Indicate whether each of the following statements is True or False, and Briefly Justify your answer....
Indicate whether each of the following statements is True or False, and Briefly Justify your answer. The Gauss-Markov Theorem says that within the class of linear, unbiased estimators, OLS estimators have zero variance.
Indicate whether each of the following statement is true, false, or uncertain, and justify your answer....
Indicate whether each of the following statement is true, false, or uncertain, and justify your answer. (a) If a company can choose to treat the cost of developing new software as capital expense or current expense for tax purpose, the company would treat it as capital expenses so that it is counted as investment. (b) Capital goods purchases are deducted both in the current VAT scheme in Korea and in the corporation income tax. (c) Theoretically, conditional grant and unconditional...
Indicate whether each of the following statement is true, false, or uncertain, and justify your answer....
Indicate whether each of the following statement is true, false, or uncertain, and justify your answer. (a) Tax is just the transfer of welfare as the sum people pays is the revenue of the government. (b) If the elasticity of demand is 0, or there is no change in quantity traded due to taxation, there is no excess burden of the tax. (c) Marginal excess burden is greater than average excess burden. (d) Imposition of Pigouvian tax to correct externality...
Indicate whether the following statements are true or false. Why or why not? Explain your answer...
Indicate whether the following statements are true or false. Why or why not? Explain your answer clearly and concisely. a. [5 points] The fact that health and income are positively correlated suggests that a policy of transferring income from the wealthy to the poor will increase overall health in society. b. [5 points] The concept of need in health care derives from the presence of externalities in healthcare markets.
Indicate whether the following statements are TRUE or FALSE and explain your answer fully, but succinctly....
Indicate whether the following statements are TRUE or FALSE and explain your answer fully, but succinctly. Without an adequate explanation, you will get no credit. a)An efficient outcome is desirable because it allows us to make Pareto improvements. b)Unlike a consumer, a firm does not face a budget constraint. c)If the wage rate increases, then those who work have a stronger incentive to supply labor.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT