Ceilia's annual income ranges between 100 thousand dollars in a good year and 36 thousand in a bad year. The probability of either occurring is 50% . Her utility function is U(y) = 4y0.5 where y is her income in thousands of dollars. What is Ceilia's value of certainty between her current income and the certain income with the same utility?

Answer rating: 100% (QA)

Heres how to find Ceilias value of certainty 1 Calculate expected utility Good year utilityU100 4 10... View the full answer