2

Suppose You are thinking about starting a new (risky) business, and the events, probabilities, and profits are as follows:

Event	Prob.	Profit
Great success	0.11	+16
Good success.	0.42	+11
Limited success	0.39	+9
Minimal success	0.08	+4

Suppose that in addition to the possible business above, you have a similar opportunity:

Event	Prob.	Profit
Great success	0.21	+16
Good success.	0.32	+11
Limited success	0.29	+9
Minimal success	0.18	+4

A. Calculate the expected value, and compare to the one above.

B. Calculate the expected utility, and compare to the one above. What explains the pattern in A and B of this problem vs. the earlier one