Risk aversion & hedging
{"Image DocumentName": "Risk aversion & hedging", "Image ImageDescription": "E[u]=.01 (4)+.99 (4.3) = Action: buy  10,000 of insurance for  125. E[u]= Even better, buy   of insurance for   E[u] = \uf0dc Optimal. \uf0771: car stolen u(\uf0771) = log(10,000) \uf0772: car not stolen u(\uf0772) = log(20,000) u(\uf0771) = log(19,875) u(\uf0772) = log(19,875) u(\uf0771) = log(15,900) u(\uf0772) = log(19,925) AAAI\u201904 July MP1-55.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}