Question: Wilfred's expected utility function is pw + (1 - p)w, , where p is the probability that his wealth is w1 and (1 - p)

Wilfred's expected utility function is pw + (1 - p)w, , where p is the probability that his wealth is w1 and (1 - p) is the probability that his wealth is w2. Wilfred is offered a choice between getting a sure payment of $Z or a lottery in which he receives $2500 with probability p = 0.7 and $6400 with probability 1 - p. . Wilfred will choose the sure payment if Z > CE and the lottery if Z

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