Question: An individual's utility-of-wealth function is () = and their current wealth is $1000. With a probability of 0.25 there will be an accident reducing the

An individual's utility-of-wealth function is () = and their current wealth is $1000.

With a probability of 0.25 there will be an accident reducing the individual's wealth to $100.

What is the maximum insurance price such that this individual still purchases full coverage?

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