Ahmad has a concave utility function of U(W) = W0.5. His only asset is shares in an Internet start-up company. Tomorrow he will learn the stock's value. He believes that it is worth RM144 with probability and RM225 with probability. What is his expected utility (EU)? What risk premium (P) would he pay to avoid bearing the risk? (a) EU = 13 and P = 2 (b) EU = 14 and P = 4 (c) EU = 15 and P = 6 O(a) O (b) (c)

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