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If you invest your entire wealth of $12 it should be possible to set up a marijuana growing operation in one of the MaGrath Valley
If you invest your entire wealth of $12 it should be possible to set up a marijuana growing operation in one of the MaGrath Valley townhouses here at UTM. If successful, the investment could be worth $64 by the end of the summer. There is a however a 60 percent chance that the operation will be raided by the UTM Police in which case your wealth would be $0. Your utility of wealth is given by U/V) = W\". It might be useful to know that root(12) = 3.464. (a) If your goal is to maximize the expected utility of your wealth should you make this investment? What is the most you would invest for a 40% chance of getting $64? (b) Three friends from your ball hockey team also have preferences like U = W172. These persons have expressed interest in forming a syndicate to make investments. Would you be happier undertaking this venture as one of four equal partners? (0) A member of the UTM Police has indicated that if you were to make a \"donation\" that the possibility of being raided would drop to zero. What is the most that your syndicate would pay for this bribe? Show this in your diagram from Part b
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