Explain the couples decision in terms of the utility

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What is the meaning of utility in this question? and how it could be calculated?

	Econimic Conditions
Investment	Good .6	Bad .4
Savings Bonds	$1,000	$ 1,000
Real Estate	10,000	-2,000

A young couple has $5,000 to invest in either savings bonds or a real estate deal. The expected return on each investment, given good and bad economic conditions, is shown in the following payoff table:

The expected value of investing in savings bonds is $1,000, and the expected value of the real estate investment is $5, 200.

However, the couple decides to invest in savings bonds. Explain the couple's decision in terms of the utility they might associate with each investment.

Reference no: EM131864939

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