Question: An agent has the following representation: Compute the maximum value this agent is willing to pay for insuring his wealth (and thus avoiding the risk)

An agent has the following representation:

100,000 0.99 90,000 0.01 Compute the maximum value this agent is willing to pay for insuring his wealth (and thus avoiding the risk) if his relative risk aversion is equal to 2.5 and his utility function is such that U(0) = 0.

100,000 0.99 90,000 0.01

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