Question: For your graduation present from college your parents are offering

For your graduation present from college, your parents are offering you your choice of two alternatives. The first alternative is to give you a money gift of $19,000. The second alternative is to make an investment in your name. This investment will quickly have the following two possible outcomes:
Your utility for receiving M thousand dollars is given by the utility function U(M) = √M + 6. Which choice should you make to maximize expected utility?

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  • CreatedSeptember 22, 2015
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