What is the minimum price to sell the ticket for

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Reference no: EM131889941

Question: Suppose that a decision maker's risk attitude toward monetary gains or losses x given by the utility function u(x) = (10,000 + x)^1/2 Suppose that a decision maker has been given a lottery ticket for free. Suppose that the lottery winning is $500,000, and the chance of winning is one in a thousand. What is the minimum price that the decision maker would be willing to sell the ticket for?

Reference no: EM131889941

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