Suppose that you are facing three gambles.A gives you a 1/3 probability of winning $18. B gives you a 2/3 probabilityof winning $9. C gives you a 1/4 probability of winning $24.

(a) What is the expected value of each of these gambles?

(b) What is the expected utility of each of these gambles if your utility functionis u(x) =x, and which one should you choose?

(c) What is the expected utility of each of these gambles if your utility functionis u(x) = x2, and which one should you choose?

d) What gamble would you select? Is this risk-averse or risk-prone?