Multiple Choice
Suppose a person has a 1/100 chance of being mugged on the street.His utility function is √(Wealth) .He initially has $1,600 which he carries on him at all times.If he's mugged he loses all of his money.What is the maximum he would be willing to pay to insure his money against mugging?
A) $40.13
B) $16
C) $25.67
D) $34.84
Correct Answer:
Verified
Correct Answer:
Verified
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