Multiple Choice
Fred has a utility function U = 10P 0.5 and also has an investment opportunity that will pay 25 with probability 0.4 and 100 with probability 0.6.What is the certainty equivalent of this opportunity?
A) 64.
B) 70.
C) 80.
D) 83.7.
E) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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