ECON1101 Lecture Notes - Lecture 2: Risk Management, Consumer Protection, Market Discipline

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aquamarinecheetah615

13 Oct 2018

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Uam chapter 12 valuing liabilities 3. Week 2 financial institution solvency & profits 4. Week 3 risk management in a financial institution 8. Uam chapter 2 risk management frameworks 8. Uam chapter 6 applying risk management 9. Parts of cohen et al (2016) 9. Week 4 data issues big and small 10. Uam chapter 10 data and assumptions 10. Week 5 monitoring financial experience 11. Uam chapter 17 monitoring experience 11. Week 7 responding to experience & reinsurance 12. Week 8 managing risk, stress tests & recovery plans 13. Iais (international association of insurance supervisors) solvency & stress test 13. Week 9 assessing financial models 14. Week 12 professionalism and vocation 18. Non-life: margin is percentage of central estimate liability 75% adequate. Formulas uses limited, grouped data e. g. net premium valuation method: typically used in non-life insurance, complexity in parameters, can be used to check reasonableness.

Related Questions

Chapter 2: The Firms and its Goals

1. Why does a firm perform certain functions internally and others through the market? Provide instances of both functions in your work place.

2. What is profit maximization hypothesis? Is this the goal of the firm you work for?

3. What is the difference between optimizing and satisficing? What firms do in reality?

4. How do we measure risk and how do we calculate stockholderâs wealth?

5. How implicit costs and opportunity costs differentiate financial profits from economic profits?

6. Explain how the Economic Value Added is the closest measure for economic profit?

burgundypug28

Chapter 9

What is the profit-maximizing level of output and price?

What is the amount of total profit?

Quantity (units)	Price (dollars)	Total Revenue (dollars)	Marginal revenue (dollars)	Total Cost	Marginal cost (dollars)

1	22			6	6
2	20			14	8
3	18			26	12
4	16			44	18
5	14			72	28
6	12			112	40
7	10			166	54
8	8			236	70

yellowwoodchuck617

Emmanuel enjoys growing zucchini in his garden and then selling his produce at the local farmers' market. The table below shows his marginal benefit and marginal cost for each hour he spends in his garden per week. The figure below plots the marginal benefit and marginal cost points.

Emmanuel's Marginal Benefit and Marginal Cost of Gardening
Hours Spent Gardening	Marginal Benefit (dollars)	Marginal Cost (dollars)
1	$21	$3
2	18	6
3	15	9
4	12	12
5	9	15
6	6	18
7	3	21

a. Given the information above, what is Emmanuel's optimal amount of time spent gardening each week?

1 hour
4 hours
0 hours
7 hours

b. If Emmanuel were to spend 2 hours each week gardening:

marginal cost would exceed marginal benefit by $12.
marginal benefit would exceed marginal cost by $12.
marginal benefit would equal marginal cost.
marginal benefit would exceed marginal cost by $18.

c. If Emmanuel were to spend 6 hours each week gardening:

marginal cost would exceed marginal benefit by $12.
marginal benefit would exceed marginal cost by $18.
marginal benefit would exceed marginal cost by $12.
marginal benefit would equal marginal cost.

ceruleanoyster72

ECON1101 Lecture Notes - Lecture 2: Risk Management, Consumer Protection, Market Discipline

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