Question: Jon has a utility function expressed by U(W) = W where W is Jon's wealth. Currently, Jon has W = $120. He faces potential loss

Jon has a utility function expressed by U(W) = W where W is Jon's wealth. Currently, Jon has W = $120. He faces potential loss L = $100 with probability p = 0.25. If Jon purchases insurance for the pure premium, what is his utility? Jon now pays $25 and the insurance firm will indemnify him for $100 if he experiences the loss.

His utility is, therefore???

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