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Ivan owns a car that worth RM100,000 with a utility function of U(x) = ln(x). He is facing a potential risk where the car

Ivan owns a car that worth RM100,000 with a utility function of U(x) = ln(x). He is facing a potential risk where the car might get stolen at the probability of 30%. An insurance company offers him an insurance option: he will get RMQ if the car is stolen with an insurance premium of 0.3Q. If Ivan is an expected utility maximiser, estimate the amount of insurance (2) that he will buy. 1

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