Midterm exam

QUESTION 1: List some ways in which risk creates an economic burden for society? Inflation causes both pure and speculative risks in our society. Give some examples of each? QUESTION 2: Mr. A owns a house valued at present price of 2.5 billion VND. He enters into two insurance policies on his house with the insured sum of 1.5 billion VND for each. He feels hell be better off to these policies because I can get a few of extra money to cover expenses if theres a fire and you cant get that if your house is only covered by one company. 1. Suppose that the house is destroyed totally by fire, how do these companies pay damages to Mr.A? 2. What are insurance principles applied in this case? And how?