L
lllusi0n
Member
We are given the utility function and fixed the first two points U(0)=0 and U(4)=1.
We then work out the expectation of the utility function, however I don’t understand the next part of the example where you state that w’=1.8, then we know that U(1.8)=1.5.
How have you determined this?
We then work out the expectation of the utility function, however I don’t understand the next part of the example where you state that w’=1.8, then we know that U(1.8)=1.5.
How have you determined this?