Question: 2. Expected utility, certainty equivalent and risk premium ( 8 points). For this question, it is important that you store exact numbers in your calculator


2. Expected utility, certainty equivalent and risk premium ( 8 points). For this question, it is important that you store exact numbers in your calculator to avoid rounding errors. Consider a gamble, in which you either gain $50 or lose $50 with equal chance. a. Find the expected utility, certainty equivalent, and risk premium of this gamble for an individual with riskless assets of $100 and a utility function of u(w)=ln(w), where w is final wealth. (3 points)
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