An individual has a utility function U = W¾, where W is her total wealth. She has one safe asset worth Rs 5,000, and another risky asset whose value can be either Rs 5,000 or Rs 1,400 with equal probabilities. What is her expected utility? (a) Rs 11,400 (b) Rs 100 oqmoo moncos lo a neo ailatiqao b eg od a dWnooni lanou o (c) Rs 2,580 (d) Rs 90

An individual has a utility function U = W¾, where W is her total wealth. She has one safe asset worth Rs 5,000, and another risky asset whose value can be either Rs 5,000 or Rs 1,400 with equal probabilities. What is her expected utility? (a) Rs 11,400 (b) Rs 100 oqmoo moncos lo a neo ailatiqao b eg od a dWnooni lanou o (c) Rs 2,580 (d) Rs 90

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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