Answer:
A) $25,000 premium
Explanation:
If the company believes that they can lose up to 20% of their net income in the event of a market downturn, then their loses can add up to $30,000 (= $150,000 x 20%). In order for them to reduce risk and not lose money, the company can buy an insurance policy and pay a premium that is worth less than $30,000. The only option available that was costs less than $30,000 is option A.
