Tianyu bought a new smartphone for $1,000. Since he is a careless person, in the next year, there is a 10% chance that he will accidentally trash his phone by dropping it to the ground, in which scenario the phone will be worth $0. Otherwise (with a 90% chance), the phone will be intact. His utility over his uncertain equity value, M, can be represented by a utility function u(M) = m. Assume that 1) the value of the phone is his payment, $1,000, and will not depreciate over time; 2) Tianyu's decision making process follows the expected utility hypothesis. A. (10 points) Does Tianyu's preference over uncertain equity exhibit risk seeking, risk averse, or risk neutral? Explain your answer briefly. Your answer (risk seeking, risk averse, or risk neutral) here: Your explanation here: B. (10 points) What is Tianyu's expected utility over the phone in the next year? Your answer of expect utility here: Your calculation here: C. (20 points) What is Tianyu's risk premium? Your answer of risk premium here: Your calculation here: D. (30 points) Suppose a full insurance policy is available, i.e., the insurance will reimburse him $1,000 (the value ofthe phone) if Tianyu trashes his phone accidentally. What is Tianyu's willingness-to-pay for a full insurance policy? Explain your answer carefully. Your answer of willingness-to-pay here: Your explanation here: E. (30 points) The phone seller does not have a full insurance policy available but offers a "VIP-Care" repair plan: a consumer pays $100 up-front, and in case of accidents, the consumer can pay $100 for repair services. Assume that the phone's value will resume to $1,000 after repair. Is it optimal for Tianyu to purchase this \"VIP-Care" plan? Explain your answer carefully. Your answer (yes or no) here: Your explanation here