3.2 Helen, the owner of Dubrow Labs, worries about the firm being sued for botched results from...
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3.2 Helen, the owner of Dubrow Labs, worries about the firm being sued for botched results from blood tests. If it isn’t sued, the firm expects to earn a profit of 100, but if it is successfully sued, its profit will be 10. Helen believes that the probability of a successful suit is 5%. If fair insurance is available and Helen is risk averse, how much insurance will she buy? (Hint: You may only be able to express your answer as an inequality.) m
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