Question - A sub-contractor has two ongoing projects with following situation. Projects Likely scenarios Which risk Certainty Insurance behavior? equivalent premium Project 1 50 % likely that there is zero profit 50% likely that the project makes $500,000 profit Project 2 50 % likely that there is a loss of $50,000 50% likely that there is a loss of $450,000 Answer the following questions based on the Prospect Theory. Answer the first three questions and complete the table above. You can copy the table on the next page below the graph. Showing calculation is optional but showing the work on the chart is required. What sort of behavior the contractor shows for the project 1 and project 22 Calculate the certainty equivalent values for both the projects. Calculate insurance premium the contractor is willing to pay for both the projects. Explain the rationale behind sub-contractor's decision on the insurance premium for both the projects. Show your work for both the projects on the chart copied from the Excel file. Question - A sub-contractor has two ongoing projects with following situation. Projects Likely scenarios Which risk Certainty Insurance behavior? equivalent premium Project 1 50 % likely that there is zero profit 50% likely that the project makes $500,000 profit Project 2 50 % likely that there is a loss of $50,000 50% likely that there is a loss of $450,000 Answer the following questions based on the Prospect Theory. Answer the first three questions and complete the table above. You can copy the table on the next page below the graph. Showing calculation is optional but showing the work on the chart is required. What sort of behavior the contractor shows for the project 1 and project 22 Calculate the certainty equivalent values for both the projects. Calculate insurance premium the contractor is willing to pay for both the projects. Explain the rationale behind sub-contractor's decision on the insurance premium for both the projects. Show your work for both the projects on the chart copied from the Excel file