Question: 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

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?

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