decision analysis Retum to the setting of Table 4.2, but now assume the utility function is U(W)

= -exp(-rW), for wealth w. Set initial wealth at w = 0, and r at .01.

a] Suppose no information is avaiIabIe. Determine the best choice, its expected utiIity, and its certain equivalent.

b] Suppose the noted imperfect information is available. Determine the best choice if good news is received, and the best choice if bad news is received. With these choices specified, caIculate the expected utility and certain equivalent.

el Do the same for perfect information.

AppendixLO1