For someone whose utility is equal to twice the square root of income, where X denotes income,and the coefficient of relative risk aversion is ½. If this individual's income is currently $25,what insurance premium would (s)he pay to avoid a 20% chance of having income fall to $9?

Question

For someone whose utility is equal to twice the square root of income,  where X denotes income,and the coefficient of relative risk aversion is ½. If this individual's income is currently $25,what insurance premium would (s)he pay to avoid a 20% chance of having income fall to $9?

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The Answer of For someone whose utility is equal to twice the square root of income,  where X denotes income,and the coefficient of relative risk aversion is ½. If this individual's income is currently $25,what insurance premium would (s)he pay to avoid a 20% chance of having income fall to $9?

For Someone Whose Utility Is Equal to Twice the Square