Chapter 3. Insurance Demand
Eeckhoudt, L., Gollier, C. and Schlesinger (2005), Economic and
Financial Decisions under Risk, Princeton University Press.
Zweifel, P. and Eisen, R. (2012) Insurance Economics, Springer, Berlin
and Heidelberg, Chapter 2.
Nicol
Business School
Economics
Semester 2, 2016
Money, Banking, and Financial Markets (ECON3350)
Tutorial 6. Insurance Demand
Solve all questions. The questions with an asterisk (*) will be marked.
Question 1*
What data do you need in order to determine the ce
Business School
Economics
Semester 2, 2016
Money, Banking, and Financial Markets (ECON3350)
Tutorial 2. Simple Interest
Solve all questions. Questions with an asterisk (*) will be marked.
The simple interest rate formula includes four variables:
Vt V0 (1
Business School
Economics
Semester 2, 2016
Money, Banking, and Financial Markets (ECON3350)
Tutorial 7. Insurance Supply
Solve all questions. The questions with an asterisk (*) will be marked.
Question 1
Suppose that on average 8 patients arrive at the tr
Business School
Economics
Semester 2, 2016
Money, Banking, and Financial Markets (ECON3350)
Tutorial 3. Interest Compounding
Solve all questions. Questions with an asterisk (*) will be marked.
As in Tutorial 2, four basic questions can be asked for each m
Business School
Economics
Semester 2, 2016
Money, Banking, and Financial Markets (ECON3350)
Tutorial 9. Bond Price, Duration and Convexity
Solve all questions. The questions with an asterisk (*) will be marked.
Question 1*
a) Compare two 10 year bonds wit
Business School
Economics
Semester 2, 2016
Money, Banking, and Financial Markets (ECON3350)
Tutorial 1. Arithmetic and Geometric Series
Solve all questions. Questions with an asterisk (*) will be marked.
Question 1*
Which series are arithmetic and which a
Business School
Economics
Semester 2, 2016
Money, Banking, and Financial Markets (ECON3350)
Tutorial 4. Taylor Series, Logarithmic and Exponential Function
Solve all questions. Questions with an asterisk (*) will be marked.
Taylor Series Approximation
A k
Chapter 3. Insurance Demand
Zweifel, P. and Eisen, R. (2012) Insurance Economics,
Berlin and Heidelberg: Springer, Chapter 2.
Newbery, D.M.G. and Stiglitz, J.E. (1981) The Theory of
Commodity Price Stabilization, Oxford: Oxford University
Press, Chapter 6
Chapter 1. Introduction
1.1. Interest Calculus
1.1.1. Mathematical Series
A mathematical series is an addition of numbers.1
a1 a2 a3
There are many types of series: arithmetic, geometric
and others.
_
1
In mathematics a sequence of numbers is called a pr
Business School
Economics
Semester 2, 2016
Money, Banking, and Financial Markets (ECON3350)
Tutorial 5. Risk Aversion
Solve all questions. The questions with an asterisk (*) will be marked.
Question 1*
Consider the CRRA utility function.
v(W )
W 1 1
1
a
Business School
Economics
Semester 2, 2016
Money, Banking and Financial Markets (ECON3350)
Tutorial 8. Annuity and Perpetuity
Solve all questions. Questions with an asterisk (*) will be marked.
All discrete payments are made at the end of the payment peri
Chapter 2. Financial Intermediaries
Funds flow directly from lenders to borrowers and
indirectly through financial intermediaries.
Direct credit
market
Borrowers
Lenders
Financial
intermediaries
82
Financial intermediaries exist because
information is as
Chapter 4. Insurance Supply
Zweifel and Eisen (2012, Chapter 6)
Cummins, J.D. (1991) Statistical and Financial Models of
Insurance Pricing and the Insurance Firm, Journal of Risk
and Insurance, 58/2, pp. 261-302.
Cummins, J.D. (1990) Asset Pricing Models
Chapter 1. Introduction
1.1. Interest Calculus
1.1.1. Mathematical Series
In financial mathematics a sequence of numbers
is called a progression.
a1 , a2 , a3
A mathematical series is an addition of numbers.
a1 a2 a3
1
There are many types of series: ar
Tidjane Thiam (born 29 July 1962) is a French Ivorian businessman
and former politician who will become the Chief Executive of Credit
Suisse in June 2015. Born in Cte d'Ivoire, he holds dual Ivorian and
French citizenship. He studied advanced mathematics
Chapter 5. Option Pricing
Hull, Ch. 14 (Wiener Processes and Its Lemma), Ch. 15
(The Black-Scholes-Merton Model).
5.1. Stochastic Processes
5.1.1. Standard Wiener Process
Norbert Wiener (1894-1964)
Random walk
266
The variable Z follows a Wiener process
Chapter 6. Insurance Demand with Risk Diversification
Zweifel and Eisen (2012, Chapter 4).
Cummins, J.D. (1990) Asset Pricing Models and Insurance Ratemaking, ASTIN Bulletin, 20/2, pp 125-166.
Most people use insurance for risk management.
Corporations
Informationasymmetry
Secrets and agents
George Akerlofs 1970 paper, The Market for Lemons, is a foundation stone of ,
information economics. The rst in our series on seminal economic ideas
N 2007 the state of Washington intro-
duced a new rule aimed a
Business School
Economics
Semester 2, 2016
Money, Banking and Financial Markets (ECON3350)
Computer Assignment 1. Ruin Probability
1. Gamma Distribution
Draw three histograms for gamma distributions with the following parameters:
Shape
Scale
1
2
1
2
5
1
3
Chapter 2. Financial Intermediaries
Funds may flow directly from lenders to borrowers
or indirectly through financial intermediaries.
Direct credit
market
Investment
Saving
Financial
intermediaries
84
Financial intermediaries exist because
information is