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Suppose that Emily's utility function is U(W) = W ^0.5, where W is wealth. She has an initial wealth of $100. How much of a
Suppose that Emily's utility function is U(W) = W ^0.5, where W is wealth. She has an initial wealth of $100. How much of a risk premium would she want to participate in a gamble that has a 50% probability of raising her wealth to $120 and a 50% probability of lowering her wealth to $75?
a) Mary's risk premium is $______enter your response here. (Enter your response rounded to two decimal places.)
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