Mathematics, 16.03.2020 17:56 ShlomoShekelstein

An agent with a logarithmic utility function of wealth tries to maximize his expected utility. The agent faces a situation in which he will incur a loss of L with probability p. The agent has the possibility to insure against this loss. The insurance premium depends on the extent of the coverage. The amount covered is denoted by α and the price of the insurance per unit of coverage is q (hence the amount the agent spends on the insurance will be αq.

Calculate the amount of coverage α* demanded by the agent as a function of the agent's initial wealth level Wi, the loss L, the probability p and the price of the insurance q.

Answers: 3

Show answers

Another question on Mathematics

Mathematics, 21.06.2019 18:30

Ineed me i stuck and i don’t want to get it wrong

Answers: 1

Answer

Mathematics, 21.06.2019 22:00

Worth 100 points need the answers asap first row -x^2 2x^2 (x/2)^2 x^2 x is less than 2 x is greater than 2 x is less than or equal to 2 x is greater than or equal to 2 second row -5 -5/2 4 5 •2 is less than x& x is less than 4 •2 is less than or equal to x & x is less than or equal to 4 •2 is less than or equal to x& x is less than 4 •2 is less than x& x is less than or equal to 4

Answers: 1

Answer

Mathematics, 21.06.2019 23:00

Is there a direction u in which the rate of change of f(x,y)equals=x squared minus 3 xy plus 4 y squaredx2−3xy+4y2 at p(1,2) equals 14? give reasons for your answer. choose the correct answer below. a. no. the given rate of change is smaller than the minimum rate of change. b. no. the given rate of change is larger than the maximum rate of change. c. yes. the given rate of change is larger than the minimum rate of change and smaller than the maximum rate of change.

Answers: 2

Answer

Mathematics, 21.06.2019 23:30

(c) compare the results of parts (a) and (b). in general, how do you think the mode, median, and mean are affected when each data value in a set is multiplied by the same constant? multiplying each data value by the same constant c results in the mode, median, and mean increasing by a factor of c. multiplying each data value by the same constant c results in the mode, median, and mean remaining the same. multiplying each data value by the same constant c results in the mode, median, and mean decreasing by a factor of c. there is no distinct pattern when each data value is multiplied by the same constant. (d) suppose you have information about average heights of a random sample of airline passengers. the mode is 65 inches, the median is 72 inches, and the mean is 65 inches. to convert the data into centimeters, multiply each data value by 2.54. what are the values of the mode, median, and mean in centimeters? (enter your answers to two decimal places.) mode cm median cm mean cm in this problem, we explore the effect on the mean, median, and mode of multiplying each data value by the same number. consider the following data set 7, 7, 8, 11, 15. (a) compute the mode, median, and mean. (enter your answers to one (1) decimal places.) mean value = median = mode = (b) multiply 3 to each of the data values. compute the mode, median, and mean. (enter your answers to one (1) decimal places.) mean value = median = mode = --

Answers: 1

Answer

You know the right answer?

An agent with a logarithmic utility function of wealth tries to maximize his expected utility. The a...

Questions