Chapter 5.2, Problem 42E

(a)

To determine

The expected yield, mean of Y for the two investments.

To compare: The results.

(b)

To determine

The expected utility, mean of $\sqrt{Y}$ using utility function $u\left(y\right)=\sqrt{Y}$ for the two investments.

To compare: The results.

To interpret: The utility function u.

(c)

To determine

The expected utility, mean of $Y^{\frac{3}{2}}$ using utility function $v\left(y\right)=y^{\frac{3}{2}}$ for the two investments.

To compare: The results.

To interpret: The utility function v.