Suppose a Person's Utility of Wealth Is Given By $U ( W ) = \sqrt { W }$

question 16

Multiple Choice

Suppose a person's utility of wealth is given by $U ( W ) = \sqrt { W }$ and his or her initial wealth is 10,000.What is the maximum amount he or she would pay for insurance against a 50 percent chance of losing 3,600?

• A)1,800.
• B)1,900.
• C)2,000.
• D)2,100.

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Definitions:

Temperatures

A measurement of the degree of heat or cold as manifested by the thermodynamic properties of a material or environment.

Tendril

A slender, coiling structure that plants use to support and anchor themselves as they climb.

Carnivorous Plants

Plants that derive some or most of their nutrients from trapping and consuming animals or protozoans, typically insects and other arthropods.

Nitrogen

A chemical element with symbol N and atomic number 7, essential to all living organisms as a constituent of proteins and nucleic acids.