Some athletes insure their bodies to protect against the possibility of getting injured and not being...
Some athletes insure their bodies to protect against the possibility of getting injured and not being able to make a living. Consider an athlete who, if healthy, will cam 5100 million. If the athlete becomes injured, she will cam S. This athlete has a VNM utility function of (x) = x2, where x is money in millions of dollars. What is the individual's risk premium if she believes she will get hurt with 30% probability? A $51 million B. 570 million C. $30 million D. $42 million OE $21 million Reset Selection