Calculation of Insurance Amount by Homework Help Classof1

Calculation of Insurance Amount

byHomework Help Classof1

Kobo ebook | June 13, 2013

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Suppose a risk-averse consumer has an initial wealth of $5,000 and a utility function .  He faces an 80 percent chance of losing $4000, and a 20 percent chance of losing $0. What is the most a consumer would pay for insurance against these losses?  Draw a diagram to illustrate this amount.

Title:Calculation of Insurance AmountFormat:Kobo ebookPublished:June 13, 2013Publisher:Classof1Language:English

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