Cindy's Attitudes Towards Risk Are Summarized by the Utility Function

question 12

Essay

Cindy's attitudes towards risk are summarized by the utility function U(w)=
.Cindy has an initial wealth of $100.There is a 10% chance that her home will sustain flood damage next year costing her $40 in repairs.What is the most she will pay to for a full $40 of flood insurance?

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