Problem 1
Maria is offered the following prospects:
P1(0.80, 1,800, 1,500)
P2(0.30, 1,200, 3,000)
P3(0.10, 200, 2,500)
P4(0.50, 600, 4,000)
If her utility function can be modeled with a square root
function, which prospect does she prefer? Which is the least
favorable to Maria? Recall that her utility function is:
$u(w) = w^{0.5}$ or the square root function