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Solve clearly The production data of a wheat farm are: Plant area: 500 ha Mean yield: 1.5 t/ha Standard deviation: 0.8 t/ha What fraction of

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The production data of a wheat farm are: Plant area: 500 ha Mean yield: 1.5 t/ha Standard deviation: 0.8 t/ha What fraction of income (output) would the farmer be willing to pay for multi-peril crop insurance if his risk preferences are CRRA with a coefficient of relative risk aversion of 1.5? Hint: (Use the Arrow-Pratt approximation and neglect prudence and temperance.)

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