(Actual Amount of Insurance CARRIED)
X Value of Loss = Amount of Recovery (Amount of Insurance REQUIRED)
Not exact matches
For example, should the
value of stock
X increase by 25 % while stock Y only gained 5 %, a large amount
of the
value in the portfolio is tied to stock
X. Should stock
X experience a sudden downturn, the portfolio will suffer higher
losses by association.
The NLP reserve at time t is the expected
value of the
loss random variable at time t given K (
x) > t
According to Lawrence Yun, NAR chief economist, lost in this discussion are the numerous Generation
X households who bought their first home, started a family and entered the middle part
of their careers only to be rattled by job
losses, falling home
values and overall economic uncertainty during and after the Great Recession.