Question

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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