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9 September, 01:50

What is premium?

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  1. 9 September, 01:51
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    See the answer below

    Explanation:

    The definition of premium will vary depending on the context in which it is being used.

    If it is used in the insurance context, a premium is an amount of money paid at regular intervals (usually annually) to an insurance company by persons that want their properties insured under a given insurance plan.

    In finance, premium can mean the total cost incurred in buying derivative financial instruments or the difference between the actual price of a bond and the price of issuance of the bond.
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