PLEASE ANSWER ALL OF PART A AND PART B

You must choose between $4.00 or the following gamble: 25% chance of winning $9.00 and 75% chance of winning $1.00.

PART A If you like risk, so () = ,

1. What is the utility of $4.00?

2. What is the utility of the gamble?

3. What is the CE?

4. Should you accept or reject the gamble? Explain.

PART B If you are risk averse,

1. What is the utility of $4.00?

2. What is the utility of the gamble?

3. What is the CE?

4. Should you accept or reject the gamble? Explain.