Question: A2: RISK and INSURANCE ... . . ..-.......... 20 points. 20 points.e A2: RISK and INSURANCE Consider the following FIRE-INSURANCE PROBLEM where fire partially

A2: RISK and INSURANCE ... " . . ..-.......... 20 points.

20 points.e A2: RISK and INSURANCE Consider the following FIRE-INSURANCE PROBLEM where fire partially destroys a $500 house.e PREMIUMe INSURANCE PAYOUT+ e EVENTe PROBABILITYe OUTCOMEe FIRE e 0.02e O. 98

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