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assume that the decision maker is risk adverse. you know that his certainty5. (20 points) Assume that the decision maker is risk averse. You know

assume that the decision maker is risk adverse. you know that his certainty5. (20 points) Assume that the decision maker is risk averse. You know that his certainty equivalent for (0.40)(0.610) is 5. What are the maximum and minimum possible prices that he may be willing to pay in order to win the lottery that has an equal chance to receive5or10, that is,(0.55)(0.510)? (HINT: normalizeu(0) = 0)

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