Shane just bought a house worth $360,000 in an area that is known for floods. A flood occurs with a 5% chance and if it occurs, his home is reduced in value to $202,500. Shane has utility function given by U(X) = under X. He would be willing to pay a maximum of for flood insurance. The fair insurance premium for flood insurance is___. Shane's risk premium is. Suppose, instead, that Shane's utility function is given by U(X) = underroot X^2. Then, the maximum he would be willing to pay for flood insurance is.
a. 6205.83
b. 1068.75
c. 1245.75
d. 5245.50
e. 7875
f. 8943.75
g. 18,000
h. 25,100

Beta coefficients and the capital asset pricing model personal finance problem katherine wilson is wondering how much risk she must undertake to generate an acceptable return on her porfolio. the risk-free return currently is 4%. the return on the overall stock market is 14%. use the capm to calculate how high the beta coefficient of katherine's portfolio would have to be to achieve a portfolio return of 16%.

8. agreement and disagreement among economists suppose that bob, an economist from a university in arizona, and cho, an economist from a public television program, are arguing over saving incentives. the following dialogue shows an excerpt from their debate: cho: i think it's safe to say that, in general, the savings rate of households in today's economy is much lower than it really needs to be to sustain an improvement in living standards. bob: i think a switch from the income tax to a consumption tax would bring growth in living standards. cho: you really think households would change their saving behavior enough in response to this to make a difference? because i don't. the disagreement between these economists is most likely due to . despite their differences, with which proposition are two economists chosen at random most likely to agree? rent ceilings reduce the quantity and quality of available housing. immigrants receive more in government benefits than they contribute in taxes. having a single income tax rate would improve economic performance.

Alandlord rented an art studio to an artist. under the terms of the signed, written, two-year lease, the artist agreed to pay the landlord $1,000 per month and to assume responsibility for all necessary repairs. after the first year of the lease, the artist assigned the balance of his lease to a sculptor. the landlord approved the sculptor as a tenant and accepted two rent payments from her, and then the landlord sold the building to an investor. the sculptor had made two payments to the investor when an electrical fire broke out in the studio, injuring the sculptor. the fire was caused by faulty wiring. the landlord was aware that there was a dangerous wiring problem when he leased the property to the artist. but when the landlord discovered how costly repairs would be, he decided it would be more profitable to sell the property than to repair it. the problem was not easily discoverable by anyone other than an expert electrician, and the landlord did not tell the artist, the sculptor, or the investor about the problem. the sculptor sues to recover damages for her injuries. from whom can the sculptor recover?