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Suppose the utility function is U ( W ) = 2 + 1 . 5 l n ( W ) . i ) What is

Suppose the utility function is U(W)=2+1.5ln(W).
i) What is the utility level at wealth levels $50,000 and $100,000?
ii) Calculate the expected wealth and expected utility of a gamble that has an equal chance of
ending up with a wealth level of $50,000 or $100,000.
iii) What is the certainty equivalent of the risky prospect?
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