The answer for problem 2.11 is a.$6,020 since 5,000+1,000e^(.04*0.5)=6,020.

Just need assistance drawing the profit diagram.

Problem 2.11. (2 points) The owner of a house worth $180,000 purchases an insurance policy at the beginning of the year for a price of $1,000. The deductible on the policy is $5,000. If after 6 months the homeowner experiences a cnsualty loss valued at $50,000, what is the homeowner's net loss? Assume that the continuously compounded interest rate equls 4.0%. (a) $6,020 (b) $11,020 (c) $50,000 (d) $51,020 (e) None of the above. Problem 2.12. (8 points) Draw the proit dingram for the homeowner's complete position consisting of both the propery and the insurance policy