Can someone answer this, please? It would be much appreciated. Thanks. a) What can...

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Finance

Can someone answer this, please? It would be much appreciated. Thanks.

a) What can catastrophe modelling be used for within a (re)insurance organisation? (5 marks)

b) Pecking order theory tells us about companies preferences when making choices around raising capital. How can pecking order theory reveal the relative impact of the World Trade Center attacks on insurers and reinsurers? (5 marks)

c) Provide a brief description of an Industry Loss Warranty (ILW) and give two reasons for a company to sell an ILW. (5 marks)

d) From your reading of Kunreuther & Linnerooth-Bayer (2003) what are the advantages and disadvantages of hedging instruments in the context of catastrophic flood risk? (5 marks)

e) What is the underlying index used in a temperature weather derivative and how is it calculated? (5 marks)

Total 25 marks

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