You are on the show Deal or No Deal and there are four boxes remaining, containing amounts e160,000, e10,000, e100 and e1. You are offered e40,000 to give up the right to open the boxes.

(a) Assuming that your aim is to maximise expected values hould you accept or reject the offer?

(b) Now assuming instead that you have an expected utility function u(x) = x and that you aim to maximise expected utility should you accept or reject the offer? (c) Given your utility function what is the minimum amount you need to be offered in order to accept the offer?