number 2

Jon has a utility function expressed by U(W) = W where VW is Jon's wealth. Currently, Jon has W = $120. He faces potential loss L = $100 with probability p = 0.25. What is Jon's Expected Utility Jon wants to purchase insurance against his potential loss. What is the Pure Premium that would be charged to Jon? (Hint: what is the Jon's expected loss? If Jon purchases insurance for the pure premium, what is his utility? Is he better off than he was without insurance? What is the most Jon would be willing to pay for insurance? Jon has a utility function expressed by U(W) = W where VW is Jon's wealth. Currently, Jon has W = $120. He faces potential loss L = $100 with probability p = 0.25. What is Jon's Expected Utility Jon wants to purchase insurance against his potential loss. What is the Pure Premium that would be charged to Jon? (Hint: what is the Jon's expected loss? If Jon purchases insurance for the pure premium, what is his utility? Is he better off than he was without insurance? What is the most Jon would be willing to pay for insurance