Question: please help me out with this question A risk averse individual wants to insure his house, which may be either in good condition or being

please help me out with this question

A risk averse individual wants to insure his house, which may be either in good condition or being destroyed by re as two possible "states of the world". His utility 3 function is Instr} where I is the realized wealth in the state of the world. With probability CLUE, his house is destroyed by Eire so it only worths l dollars. Dthemise, 1116: house worths l dollars. Part a. {10 marks} Show that if "r :a CLUE. then he buys more! less than full insurance. Part b. {5 trunks]I Show that the insurance companyr has zero expected prot when 'r = .5 instead

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