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Chance of losing half of wealth

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Monica's utility is determined by his wealth such that U=log(w) , where W is his wealth in dollars. If he has a current wealth of $350,000, approximately what is the most he would willingly pay to insure against a 1% chance of losing half of his wealth?

  • $2,417
  • $1,570
  • $554.40
  • $5.54

Reference no: EM131437996

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