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

question 7

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 16 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)3,610 dollars.
• B)7,220 dollars.
• C)100,000 dollars.
• D)between 15 and 16 million dollars.
• E)14,440 dollars.

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Definitions:

Normative Commitment

An individual's psychological attachment to an organization, characterized by a feeling of obligation to remain with the organization.

Affective Commitment

The emotional attachment an employee feels towards their organization, influencing their willingness to remain a part of it.

Continuance Commitment

A form of commitment that is based on the costs that an individual associates with leaving an organization.

Affective Commitment

The emotional attachment, identification, and involvement that an employee has with their organization.