A. Please carefully read instructions specific to each question. This should tell you what I am looking for specifically in your answer rather than just a general answer. B. Questions which ask you to explain something - you are required to explain the economic theory with proper explanation in plain English. Topic 5: 1. Suppose Edward's utility function is given by U = Y0.5, where U is utility and Y is income. He makes $400 from his job. Say he has a 40% probability of getting a heart problem which will cost him $300. Answer the following (NOTE: Show your calculations in all of the questions below.) (i) What is the pure premium in this case? (10 points) (ii) If the insurance company charges $140, will Edward buy the health insurance? (10 points) (iii) If the premium is $140, calculate the loading fee. (5 points)