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Questions 5-7 ask you to consider risky prospects Y and Z, below: Y Z ($40, 0. 75; $60, 0.25) (S0, 0.40; $75,0.60) S. (10 poi

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= 0.75 (40) +. (P. 25) 60 Same because prospect z is mean preservi 45 0:75 (45-40025 (45-Lo) 0.75 (25) +0。25(225) =loJ3 ~173D Certaunly equivalent (CE) 1175 45 -) Slope 60 60-145 Slope = 0.069 , V75 40145 Gow o CE, 4 75 0. 115 Certainty SlopeY)ope(2

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