Question: Let u me w2 for 20. compute the exact risk premium if initial wealth is 4 and if a decision maker faces the lottery 2.

Let u me w2 for 20. compute the exact risk premium

Let u me w2 for 20. compute the exact risk premium if initial wealth is 4 and if a decision maker faces the lottery 2. +2, Explain why the risk premium is negative. c) If the utility function becomes v ut, what happens to the risk pre- mium? Show that v is a convex transformation of M

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