Insurance, Microeconomics

Assignment Help:
Sita expects her future earnings to be worth Rs 100. If she falls ill, her expected future earning will be Rs 25, There is a belief that she may fall ill 2 with probability of -3 while the probability of remaining in good health is 3. Let her utility function be given as u(y)= y Suppose that an insurance company offers to fully insure sita against loss of earnings caused by illness against an actuarially fair premium.

(a) Will Sita accept the insurance Explain

(b) What is the maximum amount that Sita would pay for the insurance?


Related Discussions:- Insurance

Income elasticity, With the recession, average incomes have fallen from $44...

With the recession, average incomes have fallen from $44,375 to $41,720.  Before the recession Groucho's Gizmos sold 600 gizmos a month. As an economics, predict the number of gizm

Strategic planning for enhancing exports, Strategic Planning for Enhancing ...

Strategic Planning for Enhancing Exports: Strategic Planning for Enhancing Exports need to be undertaken at the national level. It is necessary  to undertake a separate and

Price elasticity of supply, Price elasticity of supply: It is the resp...

Price elasticity of supply: It is the responsiveness of quantity supplied of a commodity to a change in the price of the commodity and measured as percentage change in quantit

What is demographic transition, What is demographic transition In the w...

What is demographic transition In the world today not all nations have gone through their demographic transitions. Many countries today aren't rich enough to have begun populat

#monopoly, Write a 1-2 page summary on markey failure

Write a 1-2 page summary on markey failure

Explain nominal gdp, Q. Explain Nominal GDP? Nominal GDP: Nominal gross...

Q. Explain Nominal GDP? Nominal GDP: Nominal gross domestic product measures total value of all the services and goods produced and traded for money in the formal economy, eval

Distinguish between interventionist and market-led strategy, Distinguish be...

Distinguish between interventionist and market-led strategies of development. Explanation of interventionist strategy; heavy government involvement in the planning of output, p

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd