Your Current Disposable Income Is $10,000 $U = \sqrt { I }$

question 44

Multiple Choice

Your current disposable income is $10,000. There is a 10% chance you will get in a serious car accident, incurring damage of $1,900. (There is a 90% chance that nothing will happen.) Your utility function is $U = \sqrt { I }$ ,where I is income. What is the fair price of this policy?

• A)$100
• B)$190
• C)$199
• D)$270

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Definitions:

Ritual

A set of fixed actions and sometimes words performed regularly, especially as part of a ceremony or to express reverence to a belief, deity, or cultural heritage.

Kubler Ross

A model developed by Elisabeth Kübler-Ross outlining the five stages of grief; denial, anger, bargaining, depression, and acceptance.

Stages of Death

Refers to the process and phases individuals undergo as they approach death, often described in psychological models such as Kubler-Ross's five stages of grief.

Grieving

A process of emotional and psychological healing after experiencing a loss.