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Jason Scott has decided to incorporate utility theory into his decision with his mortgage application. The following table describes Jason's utility function:

Monetary Value	Utility
-$4800	0.00
-$2900	0.10
-$2400	0.12
-$1000	0.15
-$500	0.19
$0	0.21
$1900	0.26
$2400	0.30
$4800	1.00

(a) How can you best describe Jason's attitude toward risk? Justify your answer.

(b) Will the use of utilities affect Jason's original decision?

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Statistics and Probability, Statistics

Category:- Statistics and Probability
Reference No.:- M92405531

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