What is the risk premium associated with the investment

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Problem 1: Manon has a utility function U(I) = 24sqrt(I) , where I is income. She has an investment opportunity where there is a 20% chance of earning $17,900, 40% chance of earning $27,300, and 40% chance of earning $37,300. What is the risk premium associated with this investment?

Reference no: EM132962920

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