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Alice is an expected utility maximiser who has a wealth of

W. She faces a lottery where with probability0<<1/2

0

0

12pshe will keep exactly her wealth. Alice tells you that she's as happy with this lottery as she would be with a situation in which she'd just have

Wfor sure.a) What is the slope of the iso-expected-value lines of the lottery Alice faces?

b) Is the preference Alice expressed to you consistent with risk neutrality, risk aversion, or risk loving? Show/prove this mathematically.