題組內容

2. Scott has an expected utility function of U(ω) = V63170b44c7ad3.jpg, whereω is his level of wealth. Currently, his only wealth is a store worth 625. The probability that his store will burn is 20%. If a fire occurs, the store will be worth nothing

(C) (8 points) Suppose that there is a competitive risk-neutral insurance company offering actuarially fair insurance. How much insurance premium will he pay to eliminate the risk?