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April 18, 2014

April 18, 2014

Posted by **nguyen hong minh** on Sunday, October 21, 2012 at 5:03am.

Lottery A gives a payoff of $2 or $4 equally likely.

Lottery B gives a payoff of $4 or $8 equally likely.

a) Calculate the expected utility of Lottery A and Lottery B together.

b) What is the certainty equivalent of Lottery A and Lottery B together?

c) Find the maximum price which this individual is willing to pay for both lotteries.

- probability needs help -
**PsyDAG**, Sunday, October 21, 2012 at 2:08pmIndicate your subject in the "School Subject" box, so those with expertise in the area will respond to the question.

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