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-Andrew Has the Utility of Wealth Curve Shown in the Above

Question 101

Multiple Choice

-Andrew has the utility of wealth curve shown in the above figure. He owns an SUV worth $30,000, and that is his only wealth. There is a 10 percent chance that he will have an accident within a year. If he does have an accident, his SUV is worthless. The value of insurance to Andrew against an accident is A) zero. B) $3,000 per year. C) $10,000 per year. D) $6,000 per year.
-Andrew has the utility of wealth curve shown in the above figure. He owns an SUV worth $30,000, and that is his only wealth. There is a 10 percent chance that he will have an accident within a year. If he does have an accident, his SUV is worthless. The value of insurance to Andrew against an accident is


A) zero.
B) $3,000 per year.
C) $10,000 per year.
D) $6,000 per year.

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