Problem
Suppose that Mr. Khan just learned that he has asthma. He visited his family physician (FP) to understand the future financial risk that he may face due to the illness. According to the FP, Mr. Khan has two options: (1) he could manage his asthma using asthma management drugs, or (2) he could avoid taking drugs, and if needed he could get treatment in the event of asthma attack. The FP informs him that the probability of having any asthma attack in his case is 60% in a given year. Based on information provided from the FP, he understands that he may have asthma attack even when he uses asthma management drugs. However, the probability of having asthma attack decreases to 5% with daily use of drugs. The drug costs $13.561 per day. Mr. Khan has initial wealth of $15,000. The treatment of asthma attack includes ambulance services, emergency visits and hospitalizations. The total cost of asthma attack per episode is $9000.
Given the information above, which option has higher financial risk for Mr. Khan? Calculate and discuss vour results
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.