Graph of utility function


Consider a person with the following utility function over wealth: u(w) = ew, where e is the exponential function (approximately equal to 2.7183) and w = wealth in hundreds of thousands of dollars. Suppose that this person has a 40% chance of wealth of $50,000 and a 60% chance of wealth of $1,000,000 as summarized by P(0.40, $50,000, $1,000,000). Construct a graph of this utility function (recall your excel?).

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: Graph of utility function
Reference No:- TGS040689

Expected delivery within 24 Hours