2) Consider an agent who faces the following risky situation. Their wealth will either be W, = $1 or Wk = $5. Their utility of wealth function is U (W) = W . The probability that they receive the lower amount of W, is P and the higher amount occurs with probability 1 P. Using this information, complete the following table and (optional, but highly encouraged) plot the missing information on the graph with a line connecting the 5 expected utilities. If the risky situation is such that there is a 25% chance of paying $1 and 75% chance of paying $5, would they choose this risky situation or $3.60 for sure if offered the choice? mm -m -_ _I m Utility and Expected Utility 2.50 2.25 2.00 i 1.75 ' 1. 50 1. 25 Utility 1. 00 0. 75 0. 50 0. 25 0.00 _ 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50 W