Question: Please provide the calculations. 1 2 3 4 5 6 7 Samantha's utility function is (Y= 105. She tries to maximize her expected utility. She
1 2 3 4 5 6 7 Samantha's utility function is (Y= 105. She tries to maximize her expected utility. She owns a car for business that she will have to replace if it is stolen. If her car is not stolen, her net income will be $122,500. If the car is stolen, her net income will be reduced by the car's replacement cost of $20,100. The probability that the car will be stolen is 20%. Use Excel to answer the following questions. 8 9 C. If Samantha buys insurance, how much would the insurance company gain in expected value if the anti-theft 20 device was installed in Samantha's car? 11 12 03 Insurance Company's income, payout and profit 14 No anti-theft device installed 15 Outcome Probability Income Payout Profit 16 No Loss 0.8 07 Loss 0.2 18 Expected Value of profit 19 20 Anti-theft device installed 21 Outcome Probability Income Payout Profit 22 No Loss 0.9 23 Loss 0.1 24 Expected value of profit 25 26 Insurance company's gain from anti-theft device 27 28
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