Refer to Exercises 53 and 54.

There are nine possible payoffs for this consultant, as fol- lows (in dollars): -250 -150 -100 0 550 700 750 950 1,050 A utility of 0 is assigned to a loss of $250 and a utility of 100 to a profit of $1,050. For each intermediate payoff I, the probabilities p such that the consultant is indifferent be-

tween payoff with certainty and a gamble in which $1,050 is gained with probability p and $250 lost with probability (Ip) are shown in the accompanying table. According to the expected utility criterion, which action should the consultant choose, and what is the expected utility of this action? PAYOFF -150 -100 0 550 700 750 950 P 05 .10 .20 .65 .70 .75 .85