If Ann's Utility Function Is U = W⁰

question 37

Multiple Choice

If Ann's utility function is U = W^0.5,and she invests in a business which can yield $6,400 with probability 1/5,and $3600 with probability 4/5,then her risk premium to avoid bearing this risk is

• A)$36.
• B)$41.6.
• C)$64.
• D)$100.