Question 4. (25 points) Jamal has n utility function U=W1/2, where W is his wealth in millions of dollars and U is the
utility he obtains from that wealth. In the final stage of n game show, the host offers Jamal q
choice between (A) S4 million for sure, or (B) q gamble that pays $ 1 million with probability
0.6 and $ 9 million with probability 0.4.
【題組】(b) Does A or B offer Jamal a higher expected prize? Explain your raasanmg with appropriate
caleulations. (Hint: The expected value of a random variable is the weighted average of the
possible outcomes, where the probabilities are the weights.)________
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VIP與詳解卡管理
