Bikul has just started a great job and plans to buy a fancy car worth $100,000. Bikul is risk-averse in money matters, but he likes to drive fast, so the probability that he wrecks the car (a total loss of $100,000) is 0.10. The probability that he has no accidents is 0.90. If an insurance company offers Bikul a fair insurance policy, the premium will be:
Select one:
a. $90,000.
b. It is impossible to calculate a premium unless we know Bikul's utility function.
