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(Here's the info from the previous question, just in case it's needed.) I really just need help with how to solve these 2 below please
(Here's the info from the previous question, just in case it's needed.)
I really just need help with how to solve these 2 below please :)
Suppose there is a risk-free investment as follows: ReturnRisk-free=7%with100%p And suppose that an investor has the following utility function: U(Return)=Return. Then, what is the utility of the given risk-free investment? U(ReturnRisk-free)? 2.45 2.83 2.24 2.65 Continuing from the previous question, suppose there is a risky investment as follows: ReturnRisky={0%14%with50%probabilitywith50%probability. Then, what is the expected utility of the given risky investment? E(U(ReturnRisky))? Question 6 Continuing from the previous question, what is the certainty equivalent return of the risky investment above? 5.83%4.67%7.00%3.50%
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