INVESTMENT INVESTMENT GOOD AVERAGE BAD {in $1000} AMOUNT SCENARIO SCENARIO SCENARIO OUTCOME PROB OUTCOME PROB OUTCOME PROS 42 . 35 45 . 10 Suppose I
INVESTMENT INVESTMENT GOOD AVERAGE BAD {in $1000} AMOUNT SCENARIO SCENARIO SCENARIO OUTCOME PROB OUTCOME PROB OUTCOME PROS 42 . 35 45 . 10 Suppose I have utility function U{*} = (>02. What is the expected utility from each investment? Which investment will I choose, if any? Show and explain your work and provide the intuition. What is the value of the risk premium for the SAFE investment? Show and explain your work and provide the intuition. What is the value of the risk premium for the RISKY investment? Show and explain your work and provide the intuition
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