. Putting it all together: Jim has mean variance utility with A=2. He has paid $40 to play a coin toss game where, if heads is flipped, Jim receives $100, if tails Jim receives 0.

a. What is the expected return of Jim's gamble? (in percent, rounded to the nearest percent)

I wrote 50

IncorrectQuestion 11

0 / 1 pts

b. The standard deviation of the gamble is 125% (1.25). How happy is Jim in utiles taking this gamble?

I wrote 2.23

Use the mean-variance utility function. Are you squaring Stdev to get variance for the function?

I wrote 20

IncorrectQuestion 12

0 / 1 pts

c. Nathalie has A=0. What is the max she is willing to pay for the gamble?