What is the formula to calculate premium with different way
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There are five variables that insurance companies use for computation of premium of an insurance policy which are: The risk premium is the amount that an investor would like to earn for the risk involved with a particular investment. Maturity premium (also called maturity risk premium (mrp)) is the component of required return that accounts for the additional interest rate risk and reinvestment risk of an investment that results from longer time till maturity.
The formula for risk premium, sometimes referred to as default risk premium, is the return on an investment minus the return that would be earned on a risk free investment.
The premium for od cover is calculated as a percentage of insurance declared value or idv (market price of your car less depreciation, as per the chart given below). We can use the following formula to work out the percentage forward premium or (discount) for the foreign currency, i.e. The premium for od cover is calculated as a percentage of insurance declared value or idv (market price of your car less depreciation, as per the chart given below). Risk premium formula helps to get a rough estimate of expected returns on a relatively risky investment as compared to.
