Question
The individual's utility-of-wealth function is U(w) = w and current wealth is $10,000. Is this individual risk-averse? What is the maximum premium that this individual
The individual's utility-of-wealth function is U(w) = w and current wealth is $10,000. Is this individual risk-averse? What is the maximum premium that this individual would pay to avoid a loss of $1900 that occurs with probability 1/2? Why is this maximum premium not equal to half of the loss?
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Microeconomics
Authors: Dean Karlan, Jonathan Morduch
1st edition
978-0077332587, 007733258X, 978-0077332648, 77332644, 978-1259163531
