Question: 2. Warren is risk-averse, with Bernoulli utility function u(w) = w and initial wealth W. He has access to an investment opportunity described by the

2. Warren is risk-averse, with Bernoulli utility function u(w) = w and initial wealth W. He has access to an investment opportunity described by the following lottery: final wealth 4W with probability 1/2, final wealth W/9 with probability 1/2. Treat W as a given number. (a) What is the expected wealth generate by the lottery? (b) What is Warren's expected utility for this lottery? (c) What is Warren's certainty equivalent of this lottery? (d) What is the difference (meaning subtraction) between the lottery's expected wealth and the certainty equivalent?

Please do not solve this exact question, if possible give me a similar example where w is a given number.

Plese help with Part A. Answer not necessary, please provide a detailed explanation of what formulas are used. Thanks.

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