A corn farmer has a revenue insurance policy that guarantees a revenue level of $925 per acre. The table below provides the risk profile for the farmer. Complete table below by calculating the...


A corn farmer has a revenue insurance policy that guarantees a revenue level of $925 per acre.<br>The table below provides the risk profile for the farmer.<br>Complete table below by calculating the indemnity payment for each weather condition scenario,<br>and then calculate the fair premium for the policy.<br>Yield<br>Price<br>Revenue<br>Weather<br>Revenue Insurance<br>Probability<br>Conditions<br>(bushels/acre<br>($/bushel)<br>($/acre)<br>Indemnity<br>Drought (very<br>dry)<br>0.05<br>95<br>$8.00<br>$760<br>0.10<br>Dry<br>135<br>$6.50<br>$878<br>Flooding (very<br>0.05<br>150<br>$6.00<br>$900<br>wet)<br>0.10<br>Wet<br>190<br>$5.00<br>$950<br>0.5<br>Normal<br>210<br>$4.80<br>$1,008<br>Above<br>0.15<br>240<br>$4.00<br>$960<br>Average<br>0.05<br>Excellent<br>280<br>$3.50<br>$980<br>Fair Premium =<br>

Extracted text: A corn farmer has a revenue insurance policy that guarantees a revenue level of $925 per acre. The table below provides the risk profile for the farmer. Complete table below by calculating the indemnity payment for each weather condition scenario, and then calculate the fair premium for the policy. Yield Price Revenue Weather Revenue Insurance Probability Conditions (bushels/acre ($/bushel) ($/acre) Indemnity Drought (very dry) 0.05 95 $8.00 $760 0.10 Dry 135 $6.50 $878 Flooding (very 0.05 150 $6.00 $900 wet) 0.10 Wet 190 $5.00 $950 0.5 Normal 210 $4.80 $1,008 Above 0.15 240 $4.00 $960 Average 0.05 Excellent 280 $3.50 $980 Fair Premium =

Jun 07, 2022
SOLUTION.PDF

Get Answer To This Question

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here