Gce Model Questions Vol1 2019 Commerce Question 5
Practice objective / multiple choice question 5 from the 2019 Gce Model Questions Vol1 Commerce examination.
An insurer offers a health‑insurance policy. The probability that a policyholder makes a claim in a year is 0.08 and the average claim amount is \(\N50,000\). The insurer wishes to add a profit loading of 15 % on the expected claim cost and must also pay a 5 % tax on the premium charged.\n\n(a) Calculate the annual premium that should be charged.\n(b) If a particular policyholder makes a claim of \(\N70,000\) during the year, determine the insurer's net profit or loss on that policy after tax.
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About This Question
This is Gce Model Questions Vol1 2019 Commerce Question 5. It is one of the objective questions from the 2019 Gce Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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