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Please help. QUESTION 5 10 points Save Answer Nia is looking to place a $100 bet on the Warriors vs. Lakers game. The Warriors have

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QUESTION 5 10 points Save Answer Nia is looking to place a $100 bet on the Warriors vs. Lakers game. The Warriors have a 40% chance of winning the game. If the Warriors win Nia will should she take the bet? receive $300 (or $200 in net minus the initial $100 bet), but if they lose then she gets nothing and loses her $100. If Nia has a utility function UN (x) = x1.2, O Yes O No O Indifferent between yes and no QUESTION 6 10 points Save Answer Lonzo is a basketball star at CSUEB and is expected to be drafted in the first round of the NBA draft next year where he will get a salary of $5 million. However, there is a 10% chance he gets injured this year and never gets drafted, missing out on his big payday. He is looking to get insurance, and finds 2 options: AllSportsInsurance is offering an insurance policy that will pay Lonzo $1 million if he gets injured for a premium price of $100,000. BBallInsurance is offering another insurance policy that will pay Lonzo $3 million if he gets injured, but this policy has a premium price of $300,000. If Lonzo is risk-averse he will O buy the policy from AllSportsInsurance O buy the policy from BBallinsurance O buy either the policy form AllSportsInsurance or BBallInsurance O buy no insurance policy O is indifferent between no insurance policy and a policyfrom either AllSportsInsurance or BBallinsuranceQUESTION 7 10 points Save Answer Zhang is opening an auto repair shop. Which of the following pricing approaches might disproportionately attract buyers who have cars in worse-than- average condition? O Three-tier pricing for repairs based on an initial assessment of repair needs: low-cost, average-cost, and high-cost repairs. O An hourly charge for time spent on the repair. O An hourly charge for time spent on the repair plus cost of parts. O A flat fee based on average cost for all repairs, with a 30-day guarantee. QUESTION 8 10 points Save Answer Match the situation described on the left with whether it is an example of adverse selection or moral hazard. Build your home in area at high risk of flooding because it has a better A. Adverse Selection view and you can get flood insurance. B. Moral Hazard Sell a mix of organic and non-organic strawberries without labeling either of them as organic or non-organic.QUESTION 9 10 points Save Answer Chrono24 hosts a marketplace for used watches. The site has 100 potential buyers of a used Rolex and 100 potential sellers. Buyers value a valid used Rolex at $2000, and value knock-off used Rolexes at $500. There are 3 types of sellers: 20 of them are selling knock-off Rolexes and will sell at any price above $300, 40 of them are selling valid used Rolexes and will sell at any price above $1300, and 40 of them are selling valid Rolexes and will sell at any price above $1800. Buyers cannot differentiate between sellers of valid used Rolexes and sellers of knock-offs. If all 100 potential sellers of watches put their watches up for sale, what price would the average buyer being willing to pay for a used Rolex? (Write answer without the dollar sign.) QUESTION 10 10 points Save Answer Chrono24 hosts a marketplace for used watches. The site has 100 potential buyers of a used Rolex and 100 potential sellers. Buyers value a valid used Rolex at $2000, and value knock-off used Rolexes at $500. There are 3 types of sellers: 20 of them are selling knock-off Rolexes and will sell at any price above $300, 40 of them are selling valid used Rolexes and will sell at any price above $1300, and 40 of them are selling valid Rolexes and will sell at any price above $1800. Buyers cannot differentiate between sellers of valid used Rolexes and sellers of knock-offs. If potential sellers only offer their watches for sale if the price is above their value of the watch, then at what price will the market for used watches stabilize? (Write answer without the dollar sign.)QUESTION 1 10 points Save Answer Idris faces a lottery that pays off $100 with 60% probability and pays off $200 with 40% probability. If Idris has a certainty equivalent of $140 for this lottery, then he is O risk averse O risk neutral O risk loving O either risk averse or risk neutral O either risk loving or risk neutral QUESTION 2 10 points Save Answer Carolina manages a restaurant along the beach in Florida. The restaurant makes $850,000 each year in profit as long as no hurricane hits the area. However if a hurricane does hit and causes partial damage, the restaurant only makes $350,000 that year, and if a hurricane hits and causes full damage, the restaurant makes $0 that year. Based on historical trends, the chance of a hurricane occurring and causing partial damage to the restaurant is 20%, and the probability of a hurricane occurring and causing full damage to the restaurant is 10%. What is the expected profit of Carolina's restaurant each year? (Write answer without the dollar sign.)QUESTION 3 10 points Save Answer Carolina manages a restaurant along the beach in Florida. The restaurant makes $850,000 each year in profit as long as no hurricane hits the area. However if a hurricane does hit and causes partial damage, the restaurant only makes $350,000 that year, and if a hurricane hits and causes full damage, the restaurant makes $0 that year. Based on historical trends, the chance of a hurricane occurring and causing partial damage to the restaurant is 20%, and the probability of a hurricane occurring and causing full damage to the restaurant is 10%. Carolina is looking to get insurance and she contacts Geico who offer her an insurance policy that will pay $300,000 if the restaurant incurs partial damage and will pay $500,000 if the restaurant incurs full damage. What is the actuarially fair premium price for this policy? (Write answer without the dollar sign.) QUESTION 4 10 points Save Answer Nia is looking to place a $100 bet on the Warriors vs. Lakers game. The Warriors have a 40% chance of winning the game. If the Warriors win Nia will bet? receive $300 (or $200 in net minus the initial $100 bet), but if they lose then she gets nothing and loses her $100. If Nia is risk neutral, should she take the O Yes O No O Indifferent between yes and no

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