TABLE 9
FROM:
Insurers are not Banks: Assessing Liquidity, Efficiency and Solvency Risk Under Alternative Approaches to Capital Adequacy
Paul Kupiec and David Nickerson
BACK TO ARTICLETable 9. Limits to trade imposed by asymmetric information
| State | Probability | Type A project production | Type B project production | Aggregate production | Aggregate available insurance contracts | Aggregate riskless production | Aggregate available bank deposits |
|---|---|---|---|---|---|---|---|
| 1 | 0 | 1.5 | 4.5 | 300 | 150 | 300 | 150 |
| 2 | 0 | 4 | 9 | 650 | 400 | 300 | 150 |
| 3 | 0 | 5 | 12 | 850 | 500 | 300 | 150 |
| 4 | 0 | 10 | 10 | 1,000 | 1,000 | 300 | 150 |
| 5 | 0 | 12 | 5 | 850 | 500 | 300 | 150 |
| 6 | 0 | 9 | 4 | 650 | 400 | 300 | 150 |
| 7 | 0 | 4.5 | 1.5 | 300 | 150 | 300 | 150 |
Stock of alternative (riskless) financial claims available in model economy, under risk-neutral distribution, owing to asymmetric information.
