subject
Mathematics, 21.02.2020 18:29 esanchez2002fcb

Nsurance – Suppose that your wealth is $10,000. Out of $10,000, $1000 is the value of your house. The probability that your house will be on fire is 10%, and you lost all the value of your house if it catches fire. a. Define the gamble b. Calculate the expected value of the gamble c. Now, suppose your utility function is = W1/2 . Calculate the Certainty Equivalent and the maximum willingness to pay for the insurance premium. d. Without calculating all the math again, what happens to the maximum willingness to pay for insurance premium if the probability of your house will be burned increase to 20%?

ansver
Answers: 3

Another question on Mathematics

question
Mathematics, 21.06.2019 19:30
At the electronics store you have a coupon for 20% off up to 2 cds you buy for cds with the original cost of $10.99 each the sales tax is 5% what is the total cost of your purchase
Answers: 1
question
Mathematics, 21.06.2019 20:50
Write the equation in logarithmic form e^x=403.429
Answers: 1
question
Mathematics, 21.06.2019 21:30
Item 1 solve for s. s+24=90 −114 −66 66 114
Answers: 2
question
Mathematics, 22.06.2019 03:20
Whuch statements about the diagram are true? select all that apply.
Answers: 1
You know the right answer?
Nsurance – Suppose that your wealth is $10,000. Out of $10,000, $1000 is the value of your house. Th...
Questions
question
Computers and Technology, 18.06.2020 03:57