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The table below shows the relationship between income and total utility for Jane Use this to answer (a) and (b) below Income Total Utility

 The table below shows the relationship between income and total utility for Jane. Use this to answer (a) and (b) below. Income Total Utility 5,000 10,000 15,000 20,000 25,000 30,000 12 30 36 40 42 (a) (b) Is Jane risk averse, risk neutral or risk loving? Explain Jane currently earns S15,000 in a riskless investment. Alternatively, she could invest in a project that has a 0.5 probability of yielding a S30,000 and a 0.5 probability of yielding $10,000. Should she alter her strategy and move her money into the more risky project? Explain your answer.

Apr 06 2020 View more View Less

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