(Step-by-Step) A bettor with utility function $U(x)=ln (x)$, where $x$ is total wealth, has a choice between the following two alternatives: A Win $10,000
Question: A bettor with utility function $\mathrm{U}(x)=\ln (x)$, where $x$ is total wealth, has a choice between the following two alternatives:
A Win $10,000 with probability 0.2
Win $1000 with probability 0.8
B Win $3000 with probability 0.9
Lose $2000 with probability 0.1
a If the bettor currently has $2500, should he choose \(\mathrm{A}\) or \(\mathrm{B} ?\)
b Repeat a, assuming the bettor has $5000.
C Repeat a, assuming the bettor has $10,000.
d Do you think that this pattern of choices between \(\mathrm{A}\) and \(\mathrm{B}\) is reasonable? Why or why not?
Deliverable: Word Document 
![[See Solution] We discussed decreasing and constant](/images/solutions/MC-solution-library-68728.jpg "[See Solution] We discussed decreasing and constant risk aversion.")
[See Solution] We discussed decreasing and constant risk aversion.
![[See Steps] As the newly hired Forecast](/images/solutions/MC-solution-library-68729.jpg "[See Steps] As the newly hired Forecast Analyst for the Pamana")
[See Steps] As the newly hired Forecast Analyst for the Pamana
(Solution Library) The following data represents glucose blood
(Step-by-Step) A recent poll by the American Automobile Club found that
![[Solved] A recent poll by the American](/images/solutions/MC-solution-library-68732.jpg "[Solved] A recent poll by the American Automobile Club found that")
[Solved] A recent poll by the American Automobile Club found that
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