# Question: Smith has an investment opportunity that pays 33 with probability

Smith has an investment opportunity that pays 33 with probability 1/2 and loses 30 with probability 1/2.

a. If his current wealth is M = 111, and his utility function is U = √M, will he make this investment?

b. Will he make it if he has two equal partners? (Be sure to calculate the relevant expected utilities to at least two decimal places.)

a. If his current wealth is M = 111, and his utility function is U = √M, will he make this investment?

b. Will he make it if he has two equal partners? (Be sure to calculate the relevant expected utilities to at least two decimal places.)

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