Below are the results of a preference test given to an executive:

1) She is indifferent between an investment that will yield a certain $10,000 and a risky venture with a 50% chance of $30,000 profit and a 50% chance of a loss of $1,000.

2) Her utility function for money has the following shape:

A new risky venture is proposed. The possible payoffs are either $0 or $20000. The probabilities of the gain cannot be determined. Find the probability combination of $0 and $20000that would make the executive indifferent to the certain $10000.

Money $ -1,000 5,000 20,000 30,000 Utility -2 0 10 20 30 Money $ -1,000 5,000 20,000 30,000 Utility -2 0 10 20 30