3.Assumptions: * Initial Wealth = W 1,000 * Premium Loading = 20% of Pure Premium * U(W) = InW *Probability distribution of Loss Probability Loss 0.5 0 0.1 80 0.2 160 0.1 400 0.1 800 Will a risk averse person prefer (1) no insurance, (2) full insurance, (3) insurance with a #80 deductible, (4) partial insurance with a 25% participation clause, (5) partial insurance with a coverage limit equal to #200 ? (20)