Question
Mark has the following utility function: U = ln ( w ) where w denotes the wealth. Mark has the chance to play in the
Mark has the following utility function: U = ln ( w ) where w denotes the wealth. Mark has the chance to play in the following lottery: with probability 0.52 the lottery gives $3,556 and with the complement probability (1-0.52), the lottery gives $989. Suppose that Mark starts with 0 wealth.
Compute Mark's expected utility from playing the lottery.
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Entrepreneurial Finance Strategy, Valuation, And Deal Structure
Authors: Janet Smith, Richard Smith, Richard Bliss
1st Edition
0804770913, 9780804770910
