Assume your car is worth $10,000 and there is 20% chance that your car will be stolen (and therefore you suffer a total loss of $10,000. The alternative is no loss with 80% chance). Further assume that an insurance policy covering the theft peril costs $1,000 and you refuse such a policy. Which of the following statements is a true statement?

• A. The fair insurance cost is $8,000 and you are risk loving.
• B. The fair insurance cost is $2,000 and you are risk averse.
• C. The fair insurance cost is $2,000 and you are risk loving.
• D. The fair insurance cost is $2,000 and you are risk loving or risk neutral.