Problem
You have a utility function given by U = 10 lnI. where I represents the monetary payoff from an investment. You are considering making an investment which, if it pays off, will give you a payoff of $100,000, but if it fails, it will give you a payoff of $20,000. Each outcome is equally likely. What is the risk premium for this lottery?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.