a. Use the certainty-equivalent approach to assess your utility function for wealth over a range of $100 to $20,000.

-U(100) = 0

U(20,000) = 1

U(1,000) = .5 U(100) + .5 U(20,000) = .5(0) + .5(1) = 0.5

U(2,000) = .5 U(1,000) + .5 U(20,000) = .5(.5) + .5(1) = 0.75

U(5,000) = .5 U(2,000) + .5 U(20,000) = .5 (.75) + .5(1) =0 .875

U(10,000) = .5 U(5,000) + .5 U(20,000) = .5(.875) + .5(1) = 0.9375

U(16,000) = .5 U(10,000) + .5 U(20,000) = .5(.9375) + .5(1) =0 .96875

b. Use the probability-equivalent approach to assess U($1,500), U($5,600), U($9,050), and U($13,700). Are these assessments consistent with the assessments made in part a?