Multiple choice

Suppose Michael has a rental income of $20,000 per year and has a job that pays $50,000. Michael has no other income sources. With a 20% probability, Michael would lose hisjob and has an income of 0. Suppose an unemployment insurance policy is available. With the unemployment insurance, the insurer pays $10,000 in the case of unemployment. The premium ofthe unemployment insurance is $2,500. Michael has a utility function that exhibits diminishing marginal return of consumption. Which is the following statements is correct? 0 The insurance is actuarially fair. 0 Michale will purchase the insurance for sure. 0 Michale will not purchase the insurance for sure. 0 It is unclear whether Michael would purchase the insurance