16. Insurance [LO 23.4] With some insurance policies, the value of the asset to be replaced is the current market value, commonly called a new-for-old policy. For example, if you bought a couch five years ago for $1 000, and the current value of the couch is $300, you would only get $300 if the couch were destroyed. However, if you had a new-forold replacement policy and, if in this case, a comparable new couch were now $1 200, you would get the full $1 200 if your couch were destroyed. How would you view this insurance in option terms?