When you are facing risks, risk aversion people would like to transfer them away. Please identify how can you transfer away the risks and then explain them with examples. Student A purchases a traffic insurance and the ferasures are as following. If the driver knocks down someone else on purpose, no payment. There is a limit of max payment of $15,000. Any fees happened under $1,500 should be covered. by the investors. The investor also needs to pay 20% out of his own pocket. student A causes an accident and a loss of $20,000. How much should he pay in total from his own pocket? The bond has a price of $1000, maturing in 4 years, the current price is $880. Another investment is to deposit the money into bank, they offer an annual interest rate of 7.5%. Which investment will you choose? Please explain your choice with both (1) NPV method and (2) future value method. If you have USD 4 million on hand and facing the exchange rates as following. How much profit can you earn with arbitrage?