39 Shamrock Oil (see Problem 37) has decided to rely on utility theory to assist in the decision concerning the oil field. The following table describes its utility function;

all monetary values are in thousands of dollars:

MONETARY VALUE UTILITY

−$ 600 0.00

−$ 500 0.03

−$ 50 0.10

$ 400 0.15

$ 550 0.17

$3,400 0.90

$3,500 1.00

(a) Redo Problem 37 using this information.

(b) How can you best describe Shamrock Oil’s attitude toward risk? Justify your answer.