Scatterbrain Samantha often forgets to lock her house. This has caused the probability of a burglary...
Scatterbrain Samantha often forgets to lock her house. This has caused the probability of a burglary to be 30%. If her house gets broken into, she faces a property loss of $10,000, otherwise she gets to keep her $100,000. If Samantha is offered an insurance policy for her house to protect her from loss at $2,000, would she buy the insurance? a. Yes because she gets to now enjoy her wealth risk-free b. No, because she can take the risk and be better off c. Yes, because she is a risk lover d. None of the above
Homework Answers
Here, the premium is much lower than the loss that she would face from the burglary. Hence, she would buy the insurance as she gets to enjoy her wealth risk free. By doing so, a risk averse nature of Samantha would be witnessed.
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Scatterbrain Samantha often forgets to lock her house. This has
caused the probability of a burglary...
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with writer up un these questions guidelines
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how?
thank you
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