Teri's preference for money can be represented by the following utility function U=x^(0.5), where x is the amount of money she has. Teri's current wealth $100. She is considering purchasing a financial asset. She believes there are only two possibilities for the value of the financial asset; it can be worth $400 or worth nothing. She believe the probability the asset is worth $400 is 25%. The price of the asset it $100.

a) Will Teri purchase the asset.

b) What is Teri's certainty equivalent for purchasing the asset?

c) Calculate Teri's risk premium for purchasing the asset.