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An investor has a utility function given as u(w) = w 0.3 and they presently have a wealth of $40,000 but face a 5% chance
- An investor has a utility function given as u(w) = w0.3 and they presently have a wealth of $40,000 but face a 5% chance of losing a $4000 deposit they put on a vacation. What is the maximum they would be willing to pay for cancellation insurance?
- $0
- $192.95
- $200
- $207.05
- $4000
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The Econometric Modelling Of Financial Time Series
Authors: Terence C. Mills, Raphael N. Markellos
3rd Edition
052171009X, 1107714125, 9780521710091, 9781107714120
