Mathematics, 31.10.2019 01:31 andrewmena05
Jamal has a utility function u=(w^1/2) , where w is his wealth in millions of dollars and u is the utility he obtains from that wealth. in the final stage of a game show, the host offers jamal a choice between (a) $4 million for sure, or (b) a gamble that pays $1 million with a probability of 60% or $9 million with a probability of 40%.
a. graph jamal's function. is he risk averse? explain.
b. does a or b offer jamal a hgigher expected prize? explain your reasoning with appropriate calculations. (hint: the expected value of a random variable is the weighted average of the possible outcomes, where the probabilities are the weights.)
c. does a or b offer jamal a higher expected utility? again, show your calculations.
d. should jamal pick a or b? why?
Answers: 3
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After being rearranged and simplified, which of the following equations could be solved using the quadratic formula? check all that apply. a. 9% + 3x2 = 14 + x-1 b. -x+ + 4x + 7 = -32-9 c. 5x + 4 = 3x4 - 2 d. 2x2 + x2 + x = 30
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Jamal has a utility function u=(w^1/2) , where w is his wealth in millions of dollars and u is the u...
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