Suppose that an individual has the following utility function, �=�., where U stands for utility and W for Wealth.  The individual currently has a net wealth of $400,000.  The individual believes there is a 5% chance they will get into a car accident this year. It is expected that a car accident would cost them $100,000 (dropping their overall wealth to $300,000).

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Suppose that an individual has the following utility function, �=�., where U stands for utility and W for Wealth.  The individual currently has a net wealth of $400,000.  The individual believes there is a 5% chance they will get into a car accident this year. It is expected that a car accident would cost them $100,000 (dropping their overall wealth to $300,000).

4430 Project Suppose that an individual has the following utility function, �=�., where U stands for utility and W for […]

 
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