Margarets rfrns vr lttris stisfis th td utilit thr. Hr utilit u lvl frm rtin lvl f wlth f dllrs is givn b u() = . Sh hs 10000$ in wlth in th bnk (ssum t b isk-fr) nd sh wns shr f dimnd min (risk sst) tht sh blivs will 4400$ with rbbilit 0,5 nd 0 with rbbilit 0,5.

. Wht is th minimum ri Mrgaret wuld rquir in hng fr hr shr f th dimnd min?

Mikes rfrns vr lttris stisfis th td utilit thr.His utilit u lvl frm rtin lvl f wlth f dllrs is givn b u()=e^(x). hs $W in wlth in th bnk (ssum t b risk fr) nd ds nt wn n thr ssts. Sus ik shrs Margarets blifs but th tntil uts nd rbbilitis f Margarets shr in th dimnd min.

b. Wht is th mimum ri Mike wuld b willing t fr Margarets shr f th dimnd min? Yu n ssum W = 19600. Yu n ls lv W s rmtr.

. n Margaret nd Mike find mutull grbl trding ri fr th shr in th dimnd min? lin with rfrn t ur nswrs bv. Yu n ls idntif th rngs f W t whih thr uld b mutull grbl trd.