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Insurance Anna's income is generated by the realization of a fair coin: she receives 1000 if Head shows up and nothing for Tail. Bill offers

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Insurance Anna's income is generated by the realization of a fair coin: she receives 1000 if "Head" shows up and nothing for "Tail". Bill offers her insurance against "Tail"-risk at a price of 60 Cents per Euro insurance. How much insurance should she buy when her preferences are given by: a. U(C) = 5C + 20 b. u(c)=Fc C. U(c) = exp(c) Insurance Anna's income is generated by the realization of a fair coin: she receives 1000 if "Head" shows up and nothing for "Tail". Bill offers her insurance against "Tail"-risk at a price of 60 Cents per Euro insurance. How much insurance should she buy when her preferences are given by: a. U(C) = 5C + 20 b. u(c)=Fc C. U(c) = exp(c)

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