Refer to the Data Provided in Table 17 -Refer to Table 17

question 125

Multiple Choice

Refer to the data provided in Table 17.1 below to answer the following question(s) . The table shows the relationship between income and utility for Jane.
Table 17.1
$$\begin{array} { | r | c | } \hline \text { Income } & \text { Total Utility } \\\hline \$ 0 & 0 \\\hline \$ 20,000 & 25 \\\hline \$ 40,000 & 45 \\\hline \$ 60,000 & 60 \\\hline \$ 80,000 & 70 \\\hline\end{array}$$
-Refer to Table 17.1. Suppose Jane has a 1/3 chance of becoming disabled in any given year. If she does become disabled, she will earn $0. If Jane does not become disabled, she will earn her usual salary of $60,000. Jane has the opportunity to purchase disability insurance which will pay her her full salary in the event she becomes disabled. How much would such an insurance policy be worth to Jane?

• A) $0
• B) $20,000 or less
• C) more than $20,000 but less than $40,000
• D) $40,000 or more

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Definitions:

Misleading Advertising

Promotional materials that deceive or have the potential to deceive through false claims, omissions, or other deceptive practices.

Tariff of Fees

A tariff of fees is a published schedule of charges or rates, especially detailing the costs associated with services provided by professionals, governments, or financial institutions.

Geographic Area

A specific location or region defined by natural or artificial boundaries.

Bid-rigging

A form of fraud in which a commercial contract is promised to one party even though for the sake of appearance several other parties also present a bid.