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3. You have filed a law suit against your employer for sexual harassment. They have offered to settle for $40,000. The alternative is to go

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3. You have filed a law suit against your employer for sexual harassment. They have offered to settle for $40,000. The alternative is to go to trial, at a cost of $10,000. Your lawyer tells you that there are three possibilities: (1) you win big: $100,000, (2) you win small: $20,000 and (3) you lose and get nothing. She thinks that there is a 50% chance that you will win big and a 20% chance that you will lose. (a) Represent your decision problem by means of a decision tree. (b) Assuming that all you care about is your wealth (and prefer more wealth to less) and that you are risk neutral, find the optimal decision

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