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1) Suppose the owner of a car worth $36K gets utility of v36 = 6. Due to their daily commute, however, the driver faces a

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1) Suppose the owner of a car worth $36K gets utility of v36 = 6. Due to their daily commute, however, the driver faces a 20% chance of a collision that will cause $11K in damage. Derive the expected value of the car. What is the actuarially fair premium? What is the owner's maximum willingness-to-pay

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