Jill possesses $180 comma 000 worth of valuables. she faces a 0.02 probability of a burglary, where she would lose jewelry worth $80 comma 000. she can buy an insurance policy for $15 comma 000 that would fully reimburse the $80 comma 000. her utility function is u(x)equals2upper x superscript 0.5. what is the actuarially fair price for the insurance policy? if the insurance is fair, then the cost of the insurance policy is $ nothing. (enter your response rounded to two decimal places.) should jill buy this insurance policy, given the price that she's been charged to buy it? jill ▼ should not should buy this policy. what is the most that jill is willing to pay for an insurance policy that fully covers her against loss? the most jill would pay for such a policy (p) is $ nothing. (enter your response rounded to two decimal places.)

Pressure systems, inc., manufactures high-accuracy liquid-level transducers. it is investigating whether it should update certain equipment now or wait to do it later. if the cost now is $200,000, what will the equivalent amount be 3 years from now at an interest rate of 10% per year?

Uppose that the federal reserve purchases a bond for $100,000 from donald truck, who deposits the proceeds in the manufacturer’s national bank. what will be the impact of this purchase on the supply of money? the money supply will increase by $100,000. the money supply will increase by $80,000. the money supply will increase by $500,000. this action will have no effect on the money supply. if the reserve requirement ratio is 20 percent, what is the maximum amount of additional loans that the manufacturer’s bank will be able to extend as the result of truck’s deposit? the maximum additional loans is $100,000. the maximum additional loans is $80,000. the maximum additional loans is $20,000. the maximum additional loans is $500,000. given the 20 percent reserve requirement, what is the maximum increase in the quantity of checkable deposits that could result throughout the entire banking system because of the fed’s action? this action will have no effect on the money supply. the money supply will eventually increase by $80,000. the money supply will eventually increase by $500,000. the money supply will eventually increase by $100,000.

Your father offers you a choice of $120,000 in 11 years or $48,500 today. use appendix b as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. if money is discounted at 11 percent, what is the present value of the $120,000?