choose one choice

Part III. Fill-in Blank Choice Your initial wealth in homeownership is $90,000, but there is a 10% chance your house will burn down, leaving you with wealth of only $40,000. Thus, you're exposed to a gamble situation with no insurance. What are chances of this situation? What is the expected value/return of this gamble outcome, i.e., EV(G) = ? If you're risk averse with your certainty equivalent of $82,000. What is the maximum insurance premium for your home policy that you would be willing to pay, i.e., 8(max) = ? What is the minimum premium that an insurance company would charge you to fully insure your home against fire, i.e., 8(min) = With a 90% chance of $90,000 and a 10% chance of $40,000. EV(G) = $41,000 8(max) = $8,000 8(min) = $0 With a 90% chance of $90,000 and a 10% chance of $40,000. EV(G) = $41,000 8(max) = $8,200 S(min) = $5,000 With a 90% chance of $90,000 and a 10% chance of $40,000. EV(G) = $85,000 8(max) =$8,000 8(min) = $5,000 With a 90% chance of $90,000 and a 10% chance of $40,000. EV(G) = $85,000 Simayton With a 90% chance of $90,000 and a 10% chance of $40,000. EV(G) = $85,000 8(max) = $9,000 8(min) = $4,000