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The Decision Maker Now Has $10,000 and Two Possible Decisions

question 17

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The decision maker now has $10,000 and two possible decisions.For Alternative 1,she loses $500 for certain (x=$9,500).For Alternative 2,she loses $0 (x=$10,000)with probability 0.9 and loses $5,000 (x=$5,000)with probability 0.10.Which alternative maximizes the expected utility of her net wealth?


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