Question
Clancy has $5,000. He plans to bet on a boxing match between Sullivan and Flanagan. He finds that he can buy coupons for $9 that
Clancy has $5,000. He plans to bet on a boxing match between Sullivan and Flanagan. He finds that he can buy coupons for $9 that will pay off $10 each if Sullivan wins. He also finds in another store some coupons that will pay off $10 if Flanagan wins. The Flanagan tickets cost $6 each. Clancy believes that the two fighters each have a probability of 1/2 of winning. Clancy is a risk averter who tries to maximize the expected value of the natural log of his wealth. In order to maximize his expected utility, he buys ____ Sullivan tickets and for the rest of the money, he buys Flanagan tickets. (Answer up tp 2 decimal places.)
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