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Jen has a utility function of U(W) = ln(W) . Her only major asset is shares in an internet start-up company. Tomorrow she will learn

Jen has a utility function of U(W) = ln(W). Her only major asset is shares in an internet start-up company. Tomorrow she will learn her stock's value. She believes that it is worth $144 with probability 1/2 and $225 with probability 1/2.

(a) What is expected value of the gamble?

(b) What is her expected utility?

(c) What risk premium, p, would she pay to avoid bearing this risk?

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