Your utility function is given by U = M^1/2.What is the expected utility of the following coin toss: heads you win $81, tails you win $100?

Name: Your utility function is given by U = M 1/2 .What is the expected utility of the following coin toss: heads you win $81, tails you win $100?
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Quizplus · Accepted Answer

The expected utility is calculated by taking the average of the utility of each outcome. For heads, the utility is √81 = 9, and for tails, the utility is √100 = 10. The expected utility is (9 + 10) / 2 = 9.5.

Your Utility Function Is Given by U = M1/2

Your Utility Function Is Given by U = M^1/2