PLEASE ITS URGENT,PLEASE ITS URGENT,PLEASE ITS URGENT, Let us say a lottery gives you a...
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PLEASE ITS URGENT,PLEASE ITS URGENT,PLEASE ITS URGENT,
Let us say a lottery gives you a monetary payoff of $16 with probability 1/2 and a monetary payoff of $81 with probability 1/2. Let us further assume that utility function, as a function of money, is given as U(m) = m^{1/4} (i.e. fourth root). What is the minimum amount I will be willing to accept, compared to the expected payoff, in order to not play the lottery?
A almost 16% less than expected payoff
B almost 4% less than expected payoff
C almost 8% less than expected payoff
D almost 19% less than expected payoff
E almost 1% less than expected payoff
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