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Please help ASAP will appreciate any and all help thank you! April is considering buying insurance for the year. Her utility index is U =

Please help ASAP will appreciate any and all help thank you!

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April is considering buying insurance for the year. Her utility index is U = tn"2 (square root of m). where m is money. Her money wealth is $2.500. She has the following probabilities of healthcare needs this year. Her ending wealth will be her starting wealth minus any healthcare spending: 1. Find the expected value of the money lottery April faces. (Hint: Remember to think in terms of the wealth April is left with after spending on healthcare. rather than what she loses. It might be useful to write out her resulting wealth associated with each illness type) 2. Find April's expected utility. 3. What is certainty equivalent that April would accept in order to be fully nancially insured against these risks? 4 What is the maximum loading (in dollars) above the actuarially fair premium such that April would still be willing to purchase full insurance

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