How many coupons would it be rational for to buy


Clancy has $1,200. He plans to bet on a boxing match between Sullivan and Flanagan. For $4, he can buy a coupon that pays $10 if Sullivan wins and nothing otherwise. For $6 he can buy a coupon that will pay $10 if Flanagan wins and nothing otherwise. Clancy doesn't agree with these odds. He thinks that the two fighters each have a probability of of winning. If he is an expected utility maximizer who tries to maximize the expected value of lnW, where lnW is the natural log of his wealth, howmany coupons would it be rational for him to buy?

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Microeconomics: How many coupons would it be rational for to buy
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