Question 2: Lottery basics Consider the following four lotteries. $200,000 0.5 $100,000 L2 L1 -$1,000 0.6...
Question 2: Lottery basics Consider the following four lotteries. $200,000 0.5 $100,000 L2 L1 -$1,000 0.6 s65,000 0.5 L3 $30.000 0.4 $30,000 Anıswer the following questions (a) Based on your preferences and the utility you perceive, rank the four lotteries. (b) Based on your answer in part (b), calculate 1/2, 14, and ra (c) Using ro, T1/4, 1/2, Ts/a, and Fı, draw a curve that fits your utility. From observation, are you risk-seeking, risk-neutral, or risk-averse? What is your risk premium for the four lotteries?