If Ann's Utility Function Is U = 3W⁰

question 10

Multiple Choice

If Ann's utility function is U = 3W^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 Arrow-Pratt measure of risk aversion is

• A)0.5/w.
• B)1/w.
• C)1.5w.
• D)3/w.

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