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Bob's utility function over wealth is fb. Bob's wealth consists of $100,000 in his bank. account, a house, and the land underneath it. There is

Bob's utility function over wealth is
\fb. Bob's wealth consists of $100,000 in his bank. account, a house, and the land underneath it. There is a 5% chance that his house will be destroyed in a re, in which case this real estate will be worth 1;"? of the original value. Compute the maximum Bob would pay for full insurance against this risk when the house + land are worth $40,000. [10 points\

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