Using option strategy concepts,what is the value of an insured home,if the value of the uninsured home is $220,000,the house was purchased for $180,000 and the house has a casualty policy costing $500 with a $2,000 deductible? Ignore interest costs.

Question

Quizplus · Accepted Answer

The insured value of the home is the value of the uninsured home ($220,000) minus the deductible ($2,000) and the cost of the casualty policy ($500).

Therefore, the insured value of the home is:

$220,000 - $2,000 - $500 = $217,500

Option B) is the correct choice.

Using Option Strategy Concepts,what Is the Value of an Insured