Question
Ceilia's annual income ranges between 100 thousand dollars in a good year and 36 thousand in a bad year. The probability of either occurring is
Ceilia's annual income ranges between 100 thousand dollars in a good year and 36 thousand in a bad year. The probability of either occurring is 50% . Her utility function is U(y) = 4y0.5 where y is her income in thousands of dollars. What is Ceilia's value of certainty between her current income and the certain income with the same utility?
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Smith and Roberson Business Law
Authors: Richard A. Mann, Barry S. Roberts
15th Edition
1285141903, 1285141903, 9781285141909, 978-0538473637
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