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Example 7 An insurer undertakes a risk x and after collecting the premium, he owns a capital w = 1 0 0 . If his

Example 7
An insurer undertakes a risk x and after collecting the premium, he
owns a capital w=100. If his utility function is u(w)=log(w) and
0. Find
a) Mean and variance of the risk
b) Risk aversion coefficient
c) Relative risk aversion
d) Premium estimate
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