Andrew Hagen offers you the following game for a small fee:

"He will tossthreefair coins all at once. If they all turn up heads, he'll give you $900. And if they all turn up tails, he'll also give you $900. But if they land with either (i) two heads and a tail or (ii) two tails and a head, he'll give you only $400."

A. What is theexpected payoffof the risky game?

B. The house cut (i.e., house advantage or house edge) is the percentage amount of money taken from the pot by the house. With a house cut of 4%, for example, a casino is expected to make $4 on every $100 you bet.If you need to pay him $600 to play the game, what is the house cut?

C. Suppose that your utility function for a monetary value $xisu(x) =x^0.5(i.e., x ). Find thecertainty equivalent ofthe risky game.