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If Ann's Utility Function Is U = W⁰

Question 11

Multiple Choice

If Ann's utility function is U = W⁰.⁵,and she invests in a business which can yield $6,400 with probability 1/5,and $3600 with probability 4/5,then her expected wealth is


A) $1280.
B) $2880.
C) $4160.
D) $5840.

Correct Answer:

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