c$)$ Assume that the investor has initial wealth $A=500.$ Let $a=0\mathrm{.}5$ Consider the lottery $L=(A+50,A-100,0\mathrm{.}6)$

Is L a fair lottery? Why?

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Calculate u $($W$)$

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Calculate the expected utility of $L.$

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What can we conclude from the above calculations if the investor has the option of playing $L$ for free?

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Showing all calculations, calculate the investor's certainty equivalent $cL$ for $L.$

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Calculate the investor's risk premium rpL for $L$

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