To calculate the Short Rate (SHO):
\[ SHO = \frac{SF}{IV} \times 100 \]
Where:
The Short Rate (SHO) is a percentage that represents the proportion of the total short fee relative to the total insurance value. It is used to understand the cost associated with short-term insurance policies or adjustments.
Let's assume the following values:
Step 1: Divide the short fee by the insurance value:
\[ \frac{SF}{IV} = \frac{150}{2000} = 0.075 \]
Step 2: Multiply the result by 100 to get the percentage:
\[ SHO = 0.075 \times 100 = 7.5\% \]
The Short Rate is 7.5%.
