A firm wishes to buy fire insurance at its plant.The loss in case of fire is estimated to be $50 million and the probability of occurrence is 0.5% over the next year.If claims are paid at the end of the year and the annual risk-free rate is 10%,compute the insurance premium.
A) $250,303
B) $236,109
C) $245,368
D) $227,273
E) $260,154
Correct Answer:
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