Question: Given that Y^0 is uni- formly distributed on [0, 1]. (a) Find the cdf of the random variable Y = 3 2Y^0; (b) Find the

Given that Y^0 is uni- formly distributed on [0, 1].

(a) Find the cdf of the random variable Y = 3 2Y^0;

(b) Find the cdf of the random variable Y(Y Cup) = 3Y^0 + 1/2;

(c) Compute the means and variances of Y and Y(Y Cup) . Conclude that an

agent with a strictly concave vNM utility function must prefer Y to Y(Y Cup).

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