Suppose that the point spread for a particular sporting event is $10$ points and that with this spread you are convinced you would have a $0\mathrm{.}60$ probability of winning a bet on your team. However, the local bookie will accept only a $$1000$ bet. Assuming that such bets are legal, would you bet on your team? $($Disregard any commission charged by the bookie.$)$ Remember that you must pay losses out of your own pocket. Your payoff table is as follows:

What decision does the expected value approach recommend?

EV $($d$1)$: $ fill in the blank $1$

EV $($d$2)$: $ fill in the blank $2$

Preferred decision:

What is your indifference probability for the $$0$ payoff? $($Although this choice isn$$t easy, be as realistic as possible. It is required for an analysis that reflects your attitude toward risk.$)$

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What decision would you make based on the expected utility approach? In this case are you a risk taker or a risk avoider?

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Would other individuals assess the same utility values you do$?$ Explain.

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