Could you please tell me specific problem solving steps?

2. Now suppose that the accident probability depends on how safely Ronald drives. Ronald has a utility function, U(w}=E(w}-0.4SD(w}, where E(.} is the expected wealth and SD(.} is the standard deviation of wealth. Safe driving requ'res substantial amount of effort, and Ronald feels the effort cost equivalent to $1,000. Ronald's accident probability is set as follows: Probability under aggressive Probability under safe driving drivin- a} Withoutinsurance, would Ronald drive safely? (4 points) b} If the insurer assumes that Ronald drives safely, what is the fair premium of a full coverage policy? (3 points} c) Now suppose that the insurer cannot monitor whether Ronald drives safely. Is the insurer willing to offer the full coverage atthe premium you obtain in part (b)? Ifyour answer is "No," what is the minimum insurance premium that makes the insurer break even?(9 points} (Hint: consider whether Ronald drives safely given the full coverage insurance). d) If the insurer offers a partial coverage policy that indemnifies only 75% of the actual loss, what is the minimum premium that makes the insurer breaks even? (9 points) (Hint: consider whether Ronald drives safely given this partial coverage insurance). e} Now suppose that the insurer offers two policies: (if; a full coverage insurance atthe premium you obtain in part (c), and (ii) a partial coverage atthe premium you obtain in part (d). Which policy would Ronald prefer? (5 points) f) Explain any potential moral risk that Ronald poses to the insurance company (4 points)