How happy is jim in utiles

Reference no: EM132196619

Question: Putting it all together: Jim has mean variance utility with A=2. He has paid $40 to play a coin toss game where, if heads is flipped, Jim receives $100, if tails Jim receives 0.

1. How happy is Jim in utiles?

2. Brian is risk neutral (e.g. A=0) how much would he be willing to pay for the same coin toss gamble if not doing anything makes Brian 0 happy?

3. How happy is Jim if he can sell his gamble to Brian for cash (assuming that Jim has all of the bargaining power so will be able to get the price from (b))?

Reference no: EM132196619

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