A capital gain is the increase in value of an asset above its initial cost.

Which of the following is NOT a voluntary exchange?

A) Tom's car is stolen from in front of his house. B) Marie buys groceries. C) Scott pays $10,000 for tuition and fees this semester. D) Emily buys a $1,000 plane ticket to fly from New York to Dallas on short notice.

Continuing with the same family from the preceding question, suppose a risk neutral insurance company exists to provide vacation insurance. Suppose further that each vacation day requires a constant expenditure, and this expenditure is standard across everybody. This allows us to simplify the problem by considering all payments to be in terms of vacation days. What is the least the insurance

company would charge (in terms of vacation days)? a. 3 b. 4 c. 5 d. 6