Billy Has a Von Neumann-Morgenstern Utility Function U(c)= C^1/2

question 11

Multiple Choice

Billy has a von Neumann-Morgenstern utility function U(c) = c^1/2.If Billy is not injured this season, he will receive an income of 4 million dollars.If he is injured, his income will be only 10,000 dollars.The probability that he will be injured is .1 and the probability that he will not be injured is .9.His expected utility is

• A)3,620 dollars.
• B)1,810 dollars.
• C)between 3 and 4 million dollars.
• D)100,000 dollars.
• E)7,240 dollars.

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Definitions:

Urgent Matter

An issue that requires immediate attention or action due to its importance or severity.

Weak Rapid Pulse

A condition characterized by a heartbeat that is both faster and weaker than normal, indicating potential cardiovascular issues.

Feeling Faint

A sensation of light-headedness or dizziness, often preceding a fainting episode, due to insufficient blood flow to the brain.

Shock

A medical condition characterized by a significant reduction in blood flow, leading to cellular dysfunction and organ failure.