What would pay to get out of the gamble

Reference no: EM13208292

Your current wealth level is M=49, and you are forced to make the following wager: if a fair coin comes up heads, you get 15; you lose 24 if it comes up tails. Your utility function is U(X)=sqrt(X).

A. What is your expected value of this gamble?
B. What is expected utility?
C. What is the most you would pay to get out of the gamble?

Reference no: EM13208292

Questions Cloud

Determine the utility function of lifetime wealth : A is a much more demanding and also a more prestigious institution than B. B is a safe option in the sense that you know you will do reasonably well academically there, and that after graduation you will land an "adequate" job.

Readmitting states that have seceded from the union : According to the Constitution, which branch of government is responsible for readmitting states that have seceded from the Union?

Find the equilibrium quantity : The weekly demand and supply functions for Sportsman 5 X 7 tents are given by the following respective functions where p is measured in dollars and x is measured in units of a hundred.

Dragging and dropping the appropriate splitting patterns : Construct a simulated 1H NMR spectrum for 1,1-dichloroethane by dragging and dropping the appropriate splitting patterns into the boxes on the chemical shift baseline

What would pay to get out of the gamble : Your current wealth level is M=49, and you are forced to make the following wager: if a fair coin comes up heads, you get 15; you lose 24 if it comes up tails. Your utility function is U(X)=sqrt(X). What is the most you would pay to get out of the ..

Why did nibco decide to purchase an erp system : Why did NIBCO decide to purchase an ERP system? Why did it choose a Big Bang approach, rather than the 3-to-5 year plan suggested by the consulting firm? Describe the pros and cons of a Big Bang approach, versus a less risky rollout strategy. If you ..

Explain what accelerating voltage is required to pass : What accelerating voltage is required to pass a N O +3 molecule through the exit slit of a magnetic sector mass spectrometer if the magnet has a field strength of 0.240T and the radius of curvature

What is the expected value of the gamble : Consider a person with an initial wealth level of 100 who faces a change to win 20 with probability 1/2 and to lose 20 with probability 1/2. A. What is the expected value of the gamble Is this gamble fair or better than fair

Health insurance plans discriminate against populations : What do you believe the role of health insurance is? Do you believe health insurance plans discriminate against populations? What issues related to health insurance do you think should be addressed from a public policy standpoint?

User Account

All Pages