Posted by **Salman** on Friday, October 16, 2009 at 10:42am.

Socrates owns just one ship. The ship is worth $200 million dollars. If the ship sinks,

Socrates loses $200 million. The probability that it will sink is .02. Socrates' total wealth, including the value of the ship is $225 million. He is an expected utility maximizer with utility U(W) equal to the square root of W. What is the maximum amount that Socrates would be willing to pay in order to be fully insured against the risk of losing his ship?

## Answer This Question

## Related Questions

- Economics - Socrates owns just one ship. The ship is worth $200 million dollars...
- Microeconomics - 10. Bob must ship his belongings worth 1,000 to England from ...
- Algebra - Sorry for asking another question, but I don't know how to set this ...
- physics - When a load of 1(10)^6 N is placed on a ship, the ship only sinks 2.5 ...
- KSU - At 3 P.M, ship A is 150 km west of ship B. Ship A is sailing east at 35 km...
- geometry - A ship leaves port and heads due east at a rate of 32 miles per hour...
- physics - An 80.9 kg astronaut is taking a space walk to work on the engines of ...
- English - 1. Get off the ship. 2. Get out the ship 3. Get down the ship. 4. Get ...
- CALCULUS - At noon, ship A is 130 km west of ship B. Ship A is sailing east at ...
- calc - At noon, ship A is 130 km west of ship B. Ship A is sailing east at 25 km...

More Related Questions