Can someone please help me with this? I have the following problem to solve:
Consider a $50 investment you are planning to make, which is guaranteed to give you a $50 profit. The utility function you will use is f(x) = x - sqrt x
What is the expected increase in your utility value if you already have:
i: $50 only
Please help me!!
Thank you in advance
Do you know what utility means? It should be a simple matter of accounting for the initial $50 and then plugging the rest into the function.