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When the crop is growing you receive a warning

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When the crop is growing you receive a warning from the government that a new disease has been found in some farms in the country, reducing profits by 70% (so only 30% of the profits will remain). That disease is not covered in the government insurance the farmer paid, as it is designed to cover only weather events. There is 30% probability the farmer would be affected by the new disease. If a private company offers disease insurance, how much insurance would be taken out if the insurance premium is 32 cents per dollar covered?

Reference no: EM132026984

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