1.13 If Chris cannot buy cold summer insurance, what is her expected wealth and what is her expected utility?

Chris’s wealth is £5,000 and it consists entirely of her share in a risky ice cream business. If the summer is cold, the business will fail, and she will have no wealth. Where Chris lives there is a 50 per cent chance each year that the summer will be cold.

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Wealth Utility (pounds) (units) 5,000 150 4,000 140 3,000 120 2,000 90 1,000 50 0 0