2. Assume a firm owns a $1,000,000 office building with the following probability distribution related to property losses Loss (S) abili 65 200,000 600,000 1,000,000 .25 08 02 The firm would like to purchase insurance for this risk and is considering the following three different insurance alternatives $200,000 Face amount of the policy Premium $75,000 Face amount of the policy = $1,000,000 Deductible $ 100,000 Premium = $110,000 Full Insurance $1,000,000 Face amount of the policy Premium = $150,000 a. Construct a before-tax loss matrix. (8 points) b. If the risk manager makes decisions by minimizing TOTAL COST, show what conditions the WVs would make if i. Full Insurance were preferred to Partial Insurance? Show all work and explain the numerical answer. (2 points) Partial Insurance were preferred to Deductible Insurance? Show all work and explain the numerical answer. (2 points) Label the WV's as follows: WVPI (partial insurance) WVD (deductible insurance) WVF (full insurance)