6.6.Backgroung - Risk Load

Card Set Information

Author:
Exam9
ID:
68724
Filename:
6.6.Backgroung - Risk Load
Updated:
2011-02-24 15:25:26
Tags:
Goldfarb
Folders:

Description:
Goldfarb
Show Answers:

Home > Flashcards > Print Preview

The flashcards below were created by user Exam9 on FreezingBlue Flashcards. What would you like to do?


  1. Std dev and var-based risk loads
    • Use σ of loss dist and calculates risk load as a multiple
    • - reflects process risks but not parameter risk
  2. Utility theory
    • Assume utility function that is relevant for the insr and then establish the premium so that U(w/risk) = U(w/o risk)
    • - lack of guidance as to the appropriate U(x)
    • - fails to distinguish btwn process and parameter risk
  3. Probability of ruin as risk load method
    • Assumes ins has target, and solves for premium
    • - no "right" target prob or ruin
    • - only provides relative risk load

What would you like to do?

Home > Flashcards > Print Preview