Kia has a utility function U(x)=log10x, for 0...
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Kia has a utility function U(x)=log10x, for 0<x where x is their total wealth. They have initial wealth of $10,000 and have become a finalist in a lottery such that their ticket will pay off $990,000 with probability 0.5, and SO with probability 0.5. a) Is Kia risk-neutral, risk-averse or risk-seeking? Explain your answer. b) Natalie wants to buy the lottery ticket from Kia. What is the minimum amount of money that Natalie could offer Kia in exchange for the ticket that Kia would be willing to аcсept? Kia has a utility function U(x)=log10x, for 0<x where x is their total wealth. They have initial wealth of $10,000 and have become a finalist in a lottery such that their ticket will pay off $990,000 with probability 0.5, and SO with probability 0.5. a) Is Kia risk-neutral, risk-averse or risk-seeking? Explain your answer. b) Natalie wants to buy the lottery ticket from Kia. What is the minimum amount of money that Natalie could offer Kia in exchange for the ticket that Kia would be willing to аcсept?
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