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Louise has a utility function over final wealth in dollars (W) given by U=w* - 100 Her initial wealth is $200,000. She has access to
Louise has a utility function over final wealth in dollars (W) given by U=w* - 100 Her initial wealth is $200,000. She has access to an investment opportunity that requires $50,000 upfront and that pays out either $40,000 (with probability 20%) or $300,000 (with probability 80%). What is the increase in her expected utility of final wealth if she undertakes the investment (compared to not undertaking the investment)? You can ignore the time value of money
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