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Hansel Tessier's utility is equal to the natural logarithm of his final wealth (a result of attending an exclusive boarding school in Gstaad in
Hansel Tessier's utility is equal to the natural logarithm of his final wealth (a result of attending an exclusive boarding school in Gstaad in his youth) Hansel's current wealth is 100000 dollars Hansel has access a security with the following payoffs: State Good Probability Payoff ($) Bad 0.5 0.5 20000 0 The risk free rate is 0% and the market risk premium is 6% At what price would Hansel be indifferent between investing in the security or not? Please provide the security price in dollars
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