Given the scenario just discussed, what is your certainty equivalent?

Review of Scenario: You are considering buying $100$ shares of a higher risk "penny stock"

which currently trades at $$1$ per share $($ $$100$ total investment$).$ After one year, there is a $35\%$

chance that the total investment will be worth $$500$ and a $65\%$ chance it will be worth $$10.$

Your utility function is equal to the square root of $w$ where $w$ is equal to the amount of money

you will have at the end of the year. Your choices are to keep the $$100$ safe by not investing it

or spending it$,$ or to use it to purchase $100$ shares of the penny stock.

$$2\mathrm{.}19$

$$10\mathrm{.}06$

$$97\mathrm{.}81$

$$100$

$$89\mathrm{.}94$