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You are indifferent ( derive the same utility ) between the following investments: a . An investment with a sure return of 1 0 0
You are indifferent derive the same utility between the following investments:
a An investment with a sure return of $
b An investment with an expected outcome of $ and standard deviation of $
c An investment with an expected outcome of $ and standard deviation of $
What is your certainty equivalent? What is your risk premium between the certainty
equivalent and investment
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