Lakisha has a utility function for income given by uiradici, Ask an Expert

Economics

Lakisha has a utility function for income given by U(I)=√I. Lakisha is ___ (risk averse/risk loving/risk neutral).

Lakisha is considering an investment that would give her an income of $10,000 with a probability of .5 or an income of $20,000 with a probability of .5. The expected utility of this investment is___. (Answer to two decimal places.)

Lakisha is also considering a safe investment that returns a certain income of $14,000. Given her utility function, Lakisha would prefer the investment with ____ (uncertain/certain) income.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91704967

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