Designing for a screen is a ________________ problem

The discount rate that should be used in the net present value calculation to compensate for risk is ________. (See Table 11.7)

A) 6 percent B) 15 percent C) 18 percent D) 24 percent

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. A) $180,000 B) $217,500 C) $220,000 D) $222,500