Bartek has a von Neumann-Morgenstern utility function U(c) = c1/2. If he is not injured this season,
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Question:
Bartek has a von Neumann-Morgenstern utility function U(c) = c1/2. If he is not injured this season, he will receive an income of $25 million. If he is injured, his income will be only $10,000. The probability that he will be injured is 0.1 and the probability that he will not be injured is 0.9. His expected utility is: a) 100,000 b) 9,020 c) 4,510 d) 18,040
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