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Business, 06.05.2020 00:30 BeautyxQueen

Yuri owns just one ship. The ship is worth $200 million dollars. If the ship sinks, Yuri loses $200 million. The probability that it will sink is .02. Yuri's total wealth, including the value of the ship is $225 million. He is an expected utility maximizer with von Neuman Morgensten utility U(W) equal to the square root of W. What is the maximum amount that Yuri would be willing to pay in order to be fully insured against the risk of losing his ship

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Yuri owns just one ship. The ship is worth $200 million dollars. If the ship sinks, Yuri loses $200...

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