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1. (25 pts) Suppose that Mary has a utility function U(W) = W0.5. Her only asset is the shares in the start-up e-com company. Next
1. (25 pts) Suppose that Mary has a utility function U(W) = W0.5. Her only asset is the shares in the start-up e-com company. Next week she will learn the stock's value. She believes that it is worth $225 with the probability 1/3, $196 with the probability 1/2 and $144 with the probability 1/6. Write down the prospect and calculate the expected value and her expected utility. 1. (25 pts) Suppose that Mary has a utility function U(W) = W0.5. Her only asset is the shares in the start-up e-com company. Next week she will learn the stock's value. She believes that it is worth $225 with the probability 1/3, $196 with the probability 1/2 and $144 with the probability 1/6. Write down the prospect and calculate the expected value and her expected utility
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