An investor has a utility function U(x)=x1/4 for salary. He has a new job offer of $80,000

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An investor has a utility function U(x)=x1/4 for salary. He has a new job offer of $80,000 with a bonus. The bonus will be 0, 10k, 20k, 30k, 40k, 50k or 60k with equal probability.

What is the certainty equivalent of this job offer?

Related Book For answer-question

Engineering Economy

ISBN: 978-0132554909

15th edition

Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

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Posted Date: Mar 29, 2023 12:48 AM

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An investor has a utility function U(x)=x1/4 for salary. He has a new job offer of $80,000

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Engineering Economy

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