2. Bob is offered a raffle ticket. With probability p, the raffle ticket wins, and pays 5 dollars. With probability 1 -p the ticket loses and pays nothing. One ticket costs 1 dollar. (a) Assume that Bob has von Neumann-Morgenstern utility u(x) = ' over change in his wealth r. This means that if Bob wins/loses d dollars his utility is u(d) = d' and NOT (initial wealth + d) . Let a be an amount of money such that Bob is indifferent between receiving 7 for sure or buying one ticket. Find a. (b) Now assume that Bob is risk-neutral. An unscrupulous raffle saleswoman makes Bob the following offer. For 50 cents, she will tell him whether the ticket for sale will win or lose before Bob decides to buy it. If p = 1/4, will Bob accept the saleswoman's offer? Assume that there is only one ticket available for him to purchase