Risk and uncertainity.

Posted by Meghanjalli Routh on Jun 04, 2013; 7:06pm
URL: http://discussion-forum.276.s1.nabble.com/Risk-and-uncertainity-tp7581749.html

Suppose you are an expected utility maximizer and you place a bet of $50,000 on India winning World cup. Your utility function is U = ln(W) and current wealth is $200,000. What is the minimum probability you must place on India winning the World cup?
Please show the working. Answer is 0.563.