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Gamble to toss a coin with equal probability

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Your friend offers you a gamble to toss a coin with equal probability of heads or tails. If heads, you get $150. If tails, you lose $20. Your utility function for income Y is U(Y)=Y^1/3. Should you take the gamble? If another friend offers you $5 to let him gamble, should you take the certain $5 instead of the gamble?

Reference no: EM131369420

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