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You are a consultant, located in Gunnedah. One of your clients is a local farmer who has five possible alternative crops to grow in her property next season and she needs to decide if to buy insurance is appropriate. You decided to evaluate the five possible crops using an Expected Utility Model (EUM) approach. In an interview with the farmer, you were able to collect this information about her utility at different income levels (in AUD’000):

Table 1. Utility of farmer Amber Lawrence at different income levels.

1. (All students) Estimate her E(U) quadratic function based on characteristics of MU (use regression analysis). Discuss about this decision. (5 Marks)