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a)Assume Andrea Watson, an investor, has log utility. Andrea faces a choice between Investment X with a utility of 6.4000 and Investment Y, which will
a)Assume Andrea Watson, an investor, has log utility. Andrea faces a choice between Investment X with a utility of 6.4000 and Investment Y, which will pay $400 in a bad state of the economy and $800 in a good state of the economy. [There are only two states.] What does the probability of the good state need to be for the investor to be indifferent between Investment X and Investment Y? [NOTE: Indifference arises when both investments have the same utility.]
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