(12 points) 2. Suppose there is an insurance company offer a "standard contract" with the premium r = $80 and payout q = $400 to anyone who will purchase it. ( 4 points) a. Alpha has healthy-state /# = 400 and sick-state income Is = $0. He has probability of illness p=0.2. Is the standard contract fair and /or full for Alpha? If he ends up getting sick, what will his final income be? (4 points) b. Beta has /# = $400 and Is = $0, but his probability of illness is p = 0.1. Is the standard contract fair and/ or full for Beta? What is Beta's expected income if he purchases the contract? (4 points) c. Gamma has /# = $800 and Is = $0, with probability of illness p = 0.25. Is the standard contract fair and/or full for Gamma