Question 12 Rhianedd has a utility function of the formu u(W)=√W. She has initial wealth of £140. She also has a lottery ticket that will pay £70 with probability 0.1 and zero otherwise. What is the certainty equivalent of the lottery for Rhianedd? Round your answer to 2 decimal places. Add your answer

Question 12 Rhianedd has a utility function of the formu u(W)=√W. She has initial wealth of £140. She also has a lottery ticket that will pay £70 with probability 0.1 and zero otherwise. What is the certainty equivalent of the lottery for Rhianedd? Round your answer to 2 decimal places. Add your answer

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.7P

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