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Suppose a consumer has a utility function of () = and an initial wealth of $200. Consider a gamble that would pay $230 with 70%

Suppose a consumer has a utility function of () = and an initial wealth of $200. Consider a gamble that would pay $230 with 70% probability and $130 with 30% probability and answer the following questions.

Is this a fair game?

What is the certainty equivalent cash holding?

What is the risk premium (the maximum this individual would pay to avoid the gamble)?

PLEASE ANSWER IN DETAIL. NO EXCEL

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