An individual is offered the following choice. Invest in a project that pays £900 with probability 0.5 and £400 with probability 0.5. What is the expected value of this project? Suppose that the...

Extracted text: An individual is offered the following choice. Invest in a project that pays £900 with probability 0.5 and £400 with probability 0.5. What is the expected value of this project? Suppose that the utility function is given by U(y) = Iny. Setting out your workings clearly with a full accompanying explanation, establish whether or not the individual will turn down this project if she is asked to pay £650. Calculate the value of the risk premium associated with this project.