Lynn has a utility function U(W) = W^1/2, where W is the amount of wealth that she has. Lynn has two assets. She has $90,000 in a bank account, and she has a house worth $160,000, so her total wealth is initially $250,000. There is a 2% chance that her house is destroyed by a fire.

a) Considering the probability that there is a fire, what is Lynn's Expected Wealth, E(W)?

E(W) = ____________________________

b) What is Lynn's Expected Utility, E(U)?

E(U) = ______________________________

c) What is Lynn's Certainty Equivalent?

CE = ______________________________

d) How much would Lynn be willing to pay for fire insurance?

WTP = _______________________________

e) What is Lynn's Risk Premium?

Risk Premium = ______________________