Question 5 (50 Marks) Scholars such as Main (1982) and Ashby and Diacon (1998) have attempted to answer the question of why widelywheld, limited liability companies purchase business insurance. Making use of these articles answer the following questions: a) Noting that P5 = E {36;} + R; show that buying insurance does not increase the value of a company to a diversied portfolio holder. (30 marks) b) Outline and explain the ve traditional factors, as discussed by Ashby and Diacon (1998), that determine the corporate demand for insurance (0 marks) c) A 212 Risk Management Game: Payoffs to (Firm 1, Firm 2} Firm 2 Given the table above, show and explain how identical duopolists would arrive at a: i) Certainty equilibrium and a (5 marks) ii) Risk equilibrium