Formulas- Risk Mgmt Exam 2

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11 Terms

1
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Actual Cash Value (ACV)

Replacement Cost − Depreciation

2
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Exclusion Ratio

Investment in the Contract ÷ Expected Return

3
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Expected Return

Periodic Annuity Payment × Payment Periods per Year × Life Expectancy

4
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Taxable Portion of Annuity Payment

Annuity Payment × (1 − Exclusion Ratio)

5
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Nontaxable Portion of Annuity Payment

Annuity Payment × Exclusion Ratio

6
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Traditional IRA Tax Savings

Contribution × Marginal Tax Rate

7
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Total IRA Tax Savings

Total Deductible Contributions × Marginal Tax Rate

8
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Pro-Rata Liability Percentage

Individual Insurer's Coverage ÷ Total Coverage

9
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Pro-Rata Liability Payment

Total Loss × (Individual Insurer's Coverage ÷ Total Coverage)

10
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Pure Comparative Negligence Recovery

Damages × (1 − Plaintiff's Fault Percentage)

11
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Comparative Negligence

Damages × (1 − Plaintiff's Fault Percentage), subject to state fault threshold