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Q. Clancy has $1,200. He plans to bet on a boxing match between Sullivan also Flanagan. For $4, he can buy a coupon that pays $10 if Sullivan wins also nothing otherwise. For $6 he can buy a coupon that will pay $10 if Flanagan wins also nothing otherwise. Clancy doesn't agree with these odds. He thinks that the two fighters every have a probability of winning. If he is an expected utility maximize who tries to maximize the expected value of ln W, where ln W is the natural log of his wealth, Explain how many coupons would it is rational for him to buy?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9160902

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