You have a net worth of $913662 and a utility function given by u(w) = WG-5. If

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You have a net worth of $913662 and a utility function given by u(w) = WG-5. If your house catches fire, a 3% likelihood of occurring, you expect it to be total loss and it was recently assessed at $673542.

What is the risk premium ($) you'd be willing to pay for full coverage against this fire risk?

Related Book For answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

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Posted Date: Jun 14, 2023 04:59 AM

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You have a net worth of $913662 and a utility function given by u(w) = WG-5. If

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To calculate the risk premium we need to determine the expected utility with and without insurance c... View the full answer

Income Tax Fundamentals 2013

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