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Blake's wealth is w=$5,000 (in thousands of dollars), and his utility function over his wealth is U(w) = 2 ln (w). He is approached by
Blake's wealth is w=$5,000 (in thousands of dollars), and his utility function over his wealth is U(w) = 2 ln (w). He is approached by a hedge fund manager who offers him a risky investment of $1,000 (also in thousands). If the investment is successful, it will double in value. If it fails, Blake will lose the entire amount
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Macroeconomics A European Perspective
Authors: Olivier Blanchard, Alessia Amighini, Francesco Giavazzi
4th Edition
1292360895, 9781292360898
