Question: Suppose the your utility function is \(U=\operatorname{Ln}(41)\) where \(I\) is the amount of income you make in a given year. Suppose that you typically make $64,000 per year, but there is a \(5 \%\) change that you get sick or injured and lose $28,000 in income due to medical cost.

1. What is your expected utility if you do not have any insurance to protect you from the adverse potential event?
2. Suppose you will buy insurance that will cover your loss. What would be a actuarially fair premium to pay? What is your expected utility if you buy this insurance policy?
3. What is the most that you'd be willing to pay for this policy

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