step by step

. Jerry has wealth of $60 and derives utility from this according to the utility ftmctim U(w) = 1 . l , W Where w is his wealth. Jerry now nds a lottery ticket (whose drawing is tomorrou that offers a 50% chance of winning $5. (a) What is the expected value of the lottery ticket? (b) What is the minimum amount for which Jerry would be willing-to-scll the tick: (c) Which is bigger, your answer to (a) or (b)? Use a clearly labelled diagram to explain why. (d) If he does not sell the ticket, what is Jerry's cost of risk