A firm estimates that the loss from a weather-related closing is $10 million and the probability of occurrence is 0.1% over the next year.If claims are paid at the end of the year,the annual risk-free rate is 5%,the market risk premium is 6%,and the beta of these losses is 0.5,compute the insurance premium.
A)$8198
B)$8918
C)$9259
D)$9598
E)$8574

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The Answer of A firm estimates that the loss from a weather-related closing is $10 million and the probability of occurrence is 0.1% over the next year.If claims are paid at the end of the year,the annual risk-free rate is 5%,the market risk premium is 6%,and the beta of these losses is 0.5,compute the insurance premium.
A)$8198
B)$8918
C)$9259
D)$9598
E)$8574

A Firm Estimates That the Loss from a Weather-Related Closing