11. Alice maximizes expected utility with an index u(x) = /I where z is the total annual income Her annual wage is $90000 and she gets an extra bonus of $70000 with probability 0.5. Alice's certainty...

11. Alice maximizes expected utility with an index u(x) = /I where z is the total annual income<br>Her annual wage is $90000 and she gets an extra bonus of $70000 with probability 0.5. Alice's<br>certainty equivalent of this gamble is<br>(A) 115000;<br>(B) 122500;<br>(C) 125000;<br>(D) 160000<br>

Extracted text: 11. Alice maximizes expected utility with an index u(x) = /I where z is the total annual income Her annual wage is $90000 and she gets an extra bonus of $70000 with probability 0.5. Alice's certainty equivalent of this gamble is (A) 115000; (B) 122500; (C) 125000; (D) 160000

Jun 03, 2022

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11. Alice maximizes expected utility with an index u(x) = /I where z is the total annual income Her annual wage is $90000 and she gets an extra bonus of $70000 with probability 0.5. Alice's certainty...

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