Q3. Suppose an insurance company oers a standard insurance contract to all customers with a premium r = $200 and payout q = $1000. Then consider the following situations: i. Individual A has healthy state income IH = $1000 and sick state income IS = $0. His probability of illness p Does he face a fair and/or full contract? ii. 0.1. Individual B has healthy state income IH = $1000 and sick state income IS = $0. His probability of illness p = 0.2. Does he face a fair and/or full contract? %| %3D

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