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These are my quesitons. Please answer ASAP> Thanks a lot! Q1 5 Points Barbara has a wealth of $640,000 and faces a potential loss of
These are my quesitons. Please answer ASAP> Thanks a lot!
Q1 5 Points Barbara has a wealth of $640,000 and faces a potential loss of $250,000 with probability 15%. Her utility function is u = /c . Barbara is the expected utility maximizer. The insurance company offers her a policy with a premium of $50000 for $250,000 coverage. Assume Barbara can buy any amount of coverage at the same price. Q1.1 1 Point What is Barbara's expected utility if she does not insure? Enter your answer here Q1.2 1 Point What is y? Round your answer to two decimal points and enter your answer in the following form (xxx) (Ex. 0.10) Enter your answer hereQ1.3 1 Point What is the slope of Barbara's budget constraint? Round your answer to two decimal points and enter your answer in the following form (xxx) (Ex. 0.10) Enter your answer here Q1.4 1 Point Will Barbara choose to be fully insured? O Yes O No Q1.5 1 Point What should be the price of insurance, y, if insurance is fair? Round your answer to two decimal points and enter your answer in the following form (xxx) (Ex. 0.10) Enter your answer hereStep by Step Solution
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