Important notes about tomorrow’s Risk Pooling class Problem

In tomorrow’s recorded lecture, there is some discussion of the Risk Pooling Class Problem (located at http://fin4335.garven.com/spring2023/rpclassproblem.pdf) based on the assigned reading entitled Supply of Insurance. When you watch the video, I highly recommend that you pause at the 34:40 mark and try to complete this class problem on your own before moving on. Right after the 34:40 mark, I spend some time solving the class problem using an Excel spreadsheet. You’ll come away with a much better understanding of the risk pooling concept if you struggle a bit with it first, before viewing my explanation of this problem.