Under an insurance contract,an investor pays a fee,called a ___________,to purchase a contract that promised payments,called _________,in specified bad states of the world.

Question

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A premium is the fee paid by the investor to the insurance company for the promise of future payouts, which are called indemnities. Discount rate and insurance rate are not correct terms in the context of insurance contracts.

Under an Insurance Contract,an Investor Pays a Fee,called a ___________,To