I am stuck on these questions. :( Previous posts were not correct.

@ Text Question 3.4 55 Question Help Q Consider a household that possesses $180,000 worth of valuables such as jewelry. This household faces a 0.02 probability of a burglary, where she would lose jewelry worth $70,000. Suppose it can buy an insurance policy for $15,000 that would fully reimburse the $70,000. The household's utility function is U(X) = 4x\". Should the household buy this insurance policy? The household should not buy this policy. What is the actuarially fair price for the insurance policy? If the insurance is fair, then the cost of the insurance policy is $ . (Enter your response rounded to two decimal places.) l'ext Question 4.2 i; Question Help a A risk-neutral plaintiff in a lawsuit must decide whether to settle a claim or go to trial. The defendants offer $70,000 to settle now. If the plaintiff does not settle, the plaintiff believes that the probability of winning at trial is 40%. If the plaintiff wins, the amount awarded to the plaintiff is X. Will the plaintiff settle if X is $87,500? What if X = $350,000? What is the critical value of X that would make the plaintiff indifferent between settling and going to trial? If the plaintiff were risk averse instead of risk neutral, would this critical value of X be higher or lower? If the amount to be awarded at trial with a win (X) were $87,500, then the plaintiff would V _ Text Question 4.6 55 Question Help a Guatam, who is risk neutral, is considering whether to invest in a new store. After investing, he can increase the probability that demand will be high at the new store by advertising at a cost of $20 (thousand). If he makes the investment but does not advertise, he has a 20% probability of making $100 (thousand) from high demand and a 80% probability of losing $100(thousand) from low demand. Should he invest in the new store? Advertising increases the probability of high demand. What is the minimum probability of high demand resulting from advertising such that Guatam decides to invest and advertise? This minimum probability is 80 %. (Enter your response as a whole number.) Text Question 4.8 A risk-neutral rm believes that the probability of a harmful cyberattack is 50%. It expects to make a prot of $180 million if no attack occurs and $120 million if it is attacked. The rm can spend $5 million to increase its electronic defenses, which reduces the probability of a successful cyberattack to 5%. Use a decision tree similar to Figure 14.4 to assess whether the rm should make this investment. The expected value from investing is E] the expected value from not investing. 25 Question Help No attack 180 No Investment 120 Attack 50% No attack 180 Investment 120 Attack 5% Q Q E