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Consider the utility function U(x) = (x-1)/(r-1). Find which r corresponds to a decision maker, who offers 4 for this game. What is the

Consider the utility function U(x) = (x-1)/(r-1). Find which r corresponds to a decision maker, who offers 4 for this game. What is the corresponding risk premium? Hint: Write a program for calculation of the certainty equivalent and find the solution by iteration.

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