The mean and standard deviation of the random wealth W are $700 and $30, respectively....
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The mean and standard deviation of the random wealth W are $700 and $30, respectively. The mean and standard deviation of the random wealth W2 are $700 and $135, respectively. Todd has exponential utility with a=0.01, while Jesse has exponential utility a=0.066. (a) Who would have the larger certainty equivalent for W? (b) Who would have the smaller risk premium for W2? (c) Which would be larger - Jesse's risk premium for W1 or his risk premium for W2? (d) Which would be smaller - Todd's certainty equivalent for W1 or his certainty equivalent for W2? Wealth 1 Wealth 2 Unable to Determine Not in this
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