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3. Shane just bought a house worth $360,000 in an area that is known for floods. A flood occurs with a 10% chance and then it

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Question 3= B

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3) Expected utility -0.9 x 5601503 +01 202,500 - 585 Risk premium or willingness to pay. 585 = V 360,000 - RP sovaring: (585)

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