1. Warrens utility is given by the function U=100W0.9, where W is wealth. Warren initially has wealth of $50k.
   1. Sketch out Warrens utility as a function of wealth in $10k wealth increments from 0 to $150k. (5) (you may use Excel, or any other graphing program, or carefully by hand).
   2. What is Warrens initial level of utility. (2)
   3. Warren has the opportunity to make an investment of $20k. There is a 50% chance that the investment will return $40k, and a 50% chance that the investment will return 0.
      1. What are the expected returns from the investment (that is, profits in excess of the $20k investment)? (5)
      2. What is Warrens expected utility if he makes the investment? (5)
      3. Should be make the investment? (2)