Answer:
Look below at the image I have provided for you <3
Step-by-step explanation:
I hope this helps!
Answer:
1/15
Step-by-step explanation:
You have a 1/3 chance of being an elf.
You have a 1/5 change of having the magic tool.
1/3 × 1/5 = 1×1/3×5 = 1/15
They are perpendicular because when you change 2x+8y=16 to slope intercept form it becomes y= -1/4x+2 and the slope (-1/4) is the negative reciprocal of 4, which is the slope for your other equation.
Please comment if you have any questions :)
Note that
Answer:
Mary's risk premium is $0.9375
Step-by-step explanation:
Mary's utility function,
Mary's initial wealth = $100
The gamble has a 50% probability of raising her wealth to $115 and a 50% probability of lowering it to $77
Expected wealth of Mary,
= (0.5 * $115) + (0.5 * $77)
= 57.5 + 38.5
= $96
The expected value of Mary's wealth is $96
Calculate the expected utility (EU) of Mary:-
The expected utility of Mary is $9.75
Mary will be willing to pay an amount P as risk premium to avoid taking the risk, where
U(EW - P) is equal to Mary's expected utility from the risky gamble.
U(EW - P) = EU
U(94 - P) = 9.63
Square root (94 - P) = 9.63
If Mary's risk premium is P, the expected utility will be given by the formula:
Mary's risk premium is $0.9375