Question: Problem 2. Suppose my utility function for asset position x is given by u(x) = x2. a) Am I risk-averse, risk-neutral, or risk-seeking? b) I

Problem 2. Suppose my utility function for asset

Problem 2. Suppose my utility function for asset position x is given by u(x) = x2. a) Am I risk-averse, risk-neutral, or risk-seeking? b) I now have $20,000 and am considering the following two lotteries: L1: With probability 1, I lose $1,000. L2: With probability.9, I gain $0. L2: With probability.1, I lose $10,000. Determine which lottery I prefer and the risk premium of L2

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