Her expected utility from owning the stock is 0.5*17^2 + 0.5*1^2 = 145. Thus her expected utility from selling the stock must be 145 or a p of sqrt(145) = $12.04
"Suppose her wealth is tied up in the stock, so that when she sells the stock she also transfers her wealth. What is the lowest price for which she would sell now? "
No idea what this sentence means.
I'm working on solving this problem and I'm having some troubles understanding b) and c).
An international investor has preferences over her wealth w, of the form u(w) = w^(1/2) . Her initial wealth is
