9. The major risk in Mary Inc. is tornado risk. The probability of a tornado loss next year is 10% and if a loss occurs, it will cost Mary $500,000. The cost of residual uncertainty is $10,000 without risk management. To mitigate fire risk, Mary has two risk management options:

Option 1: Spend $15,000 to implement loss prevention to reduce loss probability to 5%. This can reduce the cost of residual uncertainty to $5,000.

Option 2: Purchase full insurance at a premium of $51,000 without loss control. If a loss occurs, the insurance company will pay the full amount of loss.

What should Mary do?