Oscar's utility function is if => 0 if

Oscars utility tunctron IS if c 0, -F ifrSO. Note that is allowed to take on negative values. A positive value is a monetary gain, a negative value is a loss. (a) Is Oscar risk-averse? Explain your answer. Hint: sketch the graph of the function u. (b) Consider the lottery L = (0, 10; 1/2, 1/2), which yields SO with probability 1/2 and S 10 with probability 1/2. What is the risk premium that Oscar associates with this lottery? How much is he willing to pay for this lottery?