4. (10 points) A small contractor is considering taking on a fixed-priced contract work. If the contractor takes this work, the profit/loss will depend on the subsurface soil condition and weather, the worst possible outcome is the contractor will lose $20,000, while the best possible outcome is the contractor will make a profit of $100,000. The contractor is indifferent between: 1) A profit of $10,000 with a certainty of 1 and 2) A 50/50 chance of gaining $100,000 or losing $20,000. The contractor is also indifferent between a certain (guaranteed) profit of $50,000 and a lottery of 90% chance of making $100,000 profit and 10% chance of losing $20,000. Use a utility scale of 0 to 1, i.e., U(-$20,000) = 0.0 and U(+$100,000) = 1.0, plot the contractor's utility curve. Discuss this contractor's risk tolerance. 4. (10 points) A small contractor is considering taking on a fixed-priced contract work. If the contractor takes this work, the profit/loss will depend on the subsurface soil condition and weather, the worst possible outcome is the contractor will lose $20,000, while the best possible outcome is the contractor will make a profit of $100,000. The contractor is indifferent between: 1) A profit of $10,000 with a certainty of 1 and 2) A 50/50 chance of gaining $100,000 or losing $20,000. The contractor is also indifferent between a certain (guaranteed) profit of $50,000 and a lottery of 90% chance of making $100,000 profit and 10% chance of losing $20,000. Use a utility scale of 0 to 1, i.e., U(-$20,000) = 0.0 and U(+$100,000) = 1.0, plot the contractor's utility curve. Discuss this contractor's risk tolerance