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Respond to the question: Expected Utility Calculation?

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10/04/2008 11:19 AM by Trux; Expected Utility Calculation

Note: There are no assigned utility values. Do I assign them myself? Even then, how do I solve this? I have Word, Excel, Powerpoint if that's how you can answer me.

Matthew is a contestant on the game show "Behind the Curtain." The host has given him $50. In front of Matthew are three curtains. Behind one curtain is a jar with three dimes. Behind the second curtain is a check for $30. Behind the third curtain is a check for $120. Assuming he is risk neutral and interested only in the cash value of the value, is Matthew willing to trade the $50 for a chance to pick a curtain at random and take whatever prize it conceals? Explain by writing the appropriate expected utility calculation. [Manage messages]