-The Above Figure Shows the Utility of Wealth Curve for a Homeowner

question 178

Multiple Choice

-The above figure shows the utility of wealth curve for a homeowner whose only possession is a $50,000 house. If there is a 20 percent chance that the home could be entirely destroyed, what is the person's expected wealth?

• A) $10,000
• B) $20,000
• C) $30,000
• D) $40,000

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