Portia Has Waited a Long Time for Her Ship to Come

Multiple Choice

Portia has waited a long time for her ship to come in, and she has concluded that it will arrive today with probability . If it does come, she will receive $16. If it doesn't come in today, it never will and she will have zero wealth. She has a von Neumann-Morgenstern utility function equal to the square root of her total income. What is the minimum price at which she would sell the rights to her ship?

A) $1
B) $2
C) $2.50
D) $4
E) None of the above.