Clancy has $5,000. He plans to bet on a boxing match between Sullivan and Flanagan. He finds that he can buy coupons for $5 that will pay off $10 each if Sullivan wins. He also finds in another store some coupons that will pay off $10 if Flanagan wins. The Flanagan tickets cost $5 each. Clancy believes that the two fighters each have a probability of of winning. Clancy is a risk averter who tries to maximize the expected value of the natural log of his wealth. Which of the following strategies would maximize his expected utility?

Question

Clancy has $5,000. He plans to bet on a boxing match between Sullivan and Flanagan. He finds that he can buy coupons for $5 that will pay off $10 each if Sullivan wins. He also finds in another store some coupons that will pay off $10 if Flanagan wins. The Flanagan tickets cost $5 each. Clancy believes that the two fighters each have a probability of  of winning. Clancy is a risk averter who tries to maximize the expected value of the natural log of his wealth. Which of the following strategies would maximize his expected utility?

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The Answer of Clancy has $5,000. He plans to bet on a boxing match between Sullivan and Flanagan. He finds that he can buy coupons for $5 that will pay off $10 each if Sullivan wins. He also finds in another store some coupons that will pay off $10 if Flanagan wins. The Flanagan tickets cost $5 each. Clancy believes that the two fighters each have a probability of  of winning. Clancy is a risk averter who tries to maximize the expected value of the natural log of his wealth. Which of the following strategies would maximize his expected utility?

Clancy Has $5,000