Question: Suppose my utility function for asset position x is given by u(x)=In x. I now have $20000 and am considering the following two lotteries: Ll:

Suppose my utility function for asset position x

Suppose my utility function for asset position x is given by u(x)=In x. I now have $20000 and am considering the following two lotteries: Ll: With probability 1, I lose $6000. L2: With probability 0.6, I gain $0, and with probability 0.4, I lose $10000. What is expected utility of Ll and L2? Determine which lottery I prefer based on expected utility criterion. (25 pts.) Select one: O a. Expected utility of L1=9.072. Expected Utility of L2=8.987, Ll is preferred. O b. Expected utility of L1=8.987. Expected utility of L2=9.072, L2 is preferred. O c. Expected utility of L1=9.547. Expected utility of L2=9.626. L2 is preferred. O d. Expected utility of L1=9.626. Expected utility of L2=9.547, Ll is preferred. O e. Expected utility of L1=9.834, Expected utility of L2=9.852, L2 is preferred. O f. Expected utility of L1=9.852, Expected utility of L2=9.834, Ll is preferred

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