Author Question: The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% ... (Read 817 times)

Capo · **Reply #20 on:** Jun 18, 2019

TY

cloud · **Reply #21 on:** Jun 18, 2019

You're welcome

jilianpiloj · **Reply #22 on:** Jun 18, 2019

The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% chance that it could all be stolen. What is the most Bob would pay for insurance that would replace his $100 should it be stolen?
◦ $50
◦ $70
◦ $75
◦ $30

lorealeza · **Reply #23 on:** Jun 18, 2019

$70

DyllonKazuo · **Reply #24 on:** Jun 18, 2019

The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% chance that it could all be stolen. If Bob could keep $50 with certainty, his utility would be
◦ a.
◦ b.
◦ c.
◦ d.

Dunkey · **Reply #25 on:** Jun 18, 2019

b.

DyllonKazuo · **Reply #26 on:** Jun 18, 2019

TY

Dunkey · **Reply #27 on:** Jun 18, 2019

You're welcome

penza · **Reply #28 on:** Jun 18, 2019

The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% chance that it could all be stolen. Bob is risk averse because
◦ he has diminishing marginal utility of wealth.
◦ he is willing to pay a premium to avoid a risky situation.
◦ his utility function is concave.
◦ All of the above.

recede · **Reply #29 on:** Jun 18, 2019

All of the above.

Author Question: The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% ... (Read 817 times)

Capo

The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% ...

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