Multiple Choice
Joe is risk-neutral with utility U = bR,where b is a positive constant and R is profit from a venture.If a gamble has a 0.4 chance of R = 1 and a 0.6 chance of R = 2,Joe's expected utility E(U) is:
A) b.
B) 1.4b.
C) 1.5b.
D) 1.6b.
E) 2b.
Correct Answer:
Verified
Correct Answer:
Verified
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