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Assume that the following utilities were assessed for Sarah Troublemaker a) Would a risk neutral decision maker be willing to take the following deal: 40%
Assume that the following utilities were assessed for Sarah Troublemaker a) Would a risk neutral decision maker be willing to take the following deal: 40% chance of winning $500, 20% chance of winning $200 and a 40% chance of losing $1,000? b) Using the utilities given in the table above, determine whether Sarah would be willing to take the deal described in part a? C) Is Sarah risk averse or is she a risk taker? What is her risk premium for this deal
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