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  6. Risk Preferences Necessary to Choose Life Insurance Funding of Buy-Sell Arrangements

Risk Preferences Necessary to Choose Life Insurance Funding of Buy-Sell Arrangements

File(s)
Cornell-Dyson-sp8511.pdf (527.49 KB)
Permanent Link(s)
https://hdl.handle.net/1813/68360
Collections
Dyson School Staff Papers
Author
Tauer, Loren W
Abstract

Pratt-Arrow risk aversion coefficients are derived such that term life insurance funding of buy-sell arrangements is preferred by decision makers with risk preferences greater than those breakeven coefficients. Given previous estimates of farmers' risk preferences, anything greater than a 25 percent loading of actuarially fair premiums would discourage life insurance funding.

Date Issued
1985-07
Publisher
Charles H. Dyson School of Applied Economics and Management, Cornell University
Type
article

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