Jeff is considering insuring against cyberattack that may le…

Jeff is cоnsidering insuring аgаinst cyberаttack that may lead tо damage tо computer equipment risk. His company is currently valued at $50,000 (estimated wealth). If he suffers damage, he will likely lose $25,000 of his company's wealth. If he gets insurance, then the insurance will cost (premium) $1000 and a payout in case of damages of $26,000. He knows from his IT Analyst that the expected value of his company's wealth without insurance can be calculated aswhile with insurance can be calculated aswhere W = wealth, L = loss due to damages, A = insurance payout, b = insurance premium, =likelihood of attack. Given that attack happens with a probability of 0.4, what is the expected value of his company's wealth with and without insurance?