Suppose you own a home that costs $200,000 and you buy homeowner's insurance to cover your house

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Suppose you own a home that costs $200,000 and you buy homeowner's insurance to cover your house against fire, wind, tornados, and other disasters. One way to view your insurance is that you purchased an option. What type of option is the homeowner's policy? As the homeowner, are you buying or selling this option?
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Fundamentals of Corporate Finance

ISBN: 978-0077861704

11th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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