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Suppose you own a chemical factory producing chemical products for agriculture. The factory is valued at $50 million. You figure that the chance of chemical

Suppose you own a chemical factory producing chemical products for agriculture. The factory is valued at $50 million. You figure that the chance of chemical explosion is 5% and the damage in case of an explosion is $30 million. The property & casualty insurance industry is highly competitive for the chemical sector. Assume that the utility function of wealth for chemical business owners is represented by 4 (= 1/4 ).

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