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Consider the utility function () = 2, where is in dollars. (A) Compute the certainty equivalent of lottery X with probability density function () =

Consider the utility function () = 2, where is in dollars.

(A) Compute the certainty equivalent of lottery X with probability

density function () = , over the interval 0 10,

shown on the right.

(B) What risk attitude is implied by comparing the expected value of this lottery to the certainty equivalent.

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