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You agree to play a lottery with the following winning profile. Winning Probability $5 000 0,2 $1 000 0,8 Assume that your utility function is

You agree to play a lottery with the following winning profile.

Winning Probability $5 000 0,2 $1 000 0,8

Assume that your utility function is U(W) = ln(w). Calculate the certainty equivalent (3 points) and the risk premium for this lottery (2 points).

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