a. Assume you only receive 29 dollars if any number greater than or equal to ten tosses
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Question:
a. Assume you only receive 29 dollars if any number greater than or equal to ten tosses are required to obtain the first head. Show that your expected value for this modified game is finite and find its value.
b. Assume the utility function of wealth W is Cramer’s square root of W instead of Bernoulli’s natural log of W. Given this, write an expression for the expected utility of the payoff and show this expression has a finite value.
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