Andre LaRenzie, Chapter 7, Question #6

In chapter 7 of "Naked Economics", by Charles Wheelen, the author brings up many significant and striking topics. The one that stuck out most to me was the passage about Insuring Against Risk.  I dealt with a lot of insurance because of my house fire, which I didn't doubt that house insurance existed, but I never would've guessed a lot of the other things that are insured in which the author brought up. For example, I never would've guessed that marine insurance against pirates looting your boat was a real thing. Charles Wheelan also brought up the topic of cancellation bonds and catastrophe bonds. The chance of a large disaster or catastrophe dictates whether the bond holder to receive their principal back plus 12% or not. That seems like a good deal which is exactly why it is striking and surprising to me. I didn't know you could a large profit off of a bond like that.