Wilfred's expected utility function is pw0.5+ (1 - p)w2.5 9 where p is the probability that his wealth is w₁ and (1 p) i

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Wilfred S Expected Utility Function Is Pw0 5 1 P W2 5 9 Where P Is The Probability That His Wealth Is W And 1 P I 1 (87.65 KiB) Viewed 41 times

Wilfred's expected utility function is pw0.5+ (1 - p)w2.5 9 where p is the probability that his wealth is w₁ and (1 p) is the probability that his wealth is w₂. Wilfred is offered a choice between getting a sure payment of $Z or a lottery in which he receives $2500 with probability p = 0.7 and $6400 with probability 1 - p. Wilfred will choose the sure payment if Z > CE and the lottery if Z < CE, where the value of CE is equal to