Smith just bought a house for $250,000. earthquake insurance, which would pay $250,000 in the event of a major earthquake, is available for $25,000. smith estimates that the probability of a major earthquake in the coming year is 10 percent, and that in the event of such a quake, the property would be worth nothing. the utility (u) that smith gets from income (i) is given as follows:

u(i) = i0.5. (smith’s utility is the square root of her income.
should smith buy the insurance?
a) yes.
b) no.
c) smith is indifferent.
d) we need more information on smith's attitude toward risk.