Question: QUESTION 5 Suppose that a decision maker's utility as a function of her wealth, x, is given by U(X) = In x (the natural logarithm

 QUESTION 5 Suppose that a decision maker's utility as a function

QUESTION 5 Suppose that a decision maker's utility as a function of her wealth, x, is given by U(X) = In x (the natural logarithm of x). The decision maker now has $15,000 and two possible decisions. For decision 1, she gains $2,000 for certain. For decision 2, she loses $4000 with probability 0.3 and gains $9000 with probability 0.7. Which decision maximizes the expected utility of her net wealth? O a. She should choose option 2. Her expected utility is 9.85. O b.5he should choose option 1. Her expected utility is 9.74. O c. She should choose option 1. Her expected utility is 9.55. O d.She should choose Option 2 as her expected income is higher than for Option 1

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