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Problem

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question

An investor has utility function U(x)=x1/4U(x) = x^{1/4} for salary. He has a new job offer which pays 80,000withabonus.Thebonuswillbe80,000 with a bonus. The bonus will be 0, 10000,10000, 20000, 30000,30000, 40000, 50000,or50000, or 60000, each with equal probability. What is the certainty equivalent value of this job offer?
Plain-text mathematical notation (without MathML)
An investor has utility function U(x)=x^(1/4) for salary. He has a new job offer which pays 80,000withabonus.Thebonuswillbe0, 10000,20000, 30000,40000, 50000,or60000, each with equal probability. What is the certainty equivalent value of this job offer?
Original LaTeX notation
An investor has utility function $U(x) = x^{1/4}$ for salary. He has a new job offer which pays $80,000 with a bonus. The bonus will be $0, $10000, $20000, $30000, $40000, $50000, or $60000, each with equal probability. What is the certainty equivalent value of this job offer?

category

business

options

  1. 100000
  2. 108610
  3. 110000
  4. 105000
  5. 90000
  6. 130000
  7. 120000
  8. 85000
  9. 95000
  10. 115000

src

theoremQA-Finance

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