Suppose a Decision Maker Has a Utility Function $$U = \sqrt { I }$$

question 63

Multiple Choice

Suppose a decision maker has a utility function $$U = \sqrt { I }$$ and is faced with a lottery where there is a 30% chance of earning $30 and a 70% chance of earning $80. What is the expected utility of this lottery?

• A)7.6
• B)7.9
• C)8.2
• D)8.5

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