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A decision maker incurs the following risk: Probability Severity 0,4 0 0,25 200 0,2 1400 0,15 5000 What is the maximum premium the decision-maker is
A decision maker incurs the following risk:
| Probability | Severity |
| 0,4 | 0 |
| 0,25 | 200 |
| 0,2 | 1400 |
| 0,15 | 5000 |
What is the maximum premium the decision-maker is ready to pay, if he:
- is risk neutral
- exhibits the constant risk aversion with the parameter a=0,001.
Discuss and comment your results.
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Bitcoin Cash What You Need To Know About Bch
Authors: Alexander O. M.
1st Edition
1976721229, 978-1976721229
