Question
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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Public Finance In Canada
Authors: Harvey S. Rosen, Ted Gayer, Jean-Francois Wen, Tracy Snoddon
5th Canadian Edition
1259030776, 978-1259030772
