Suppose that there is a gamble for which you will get $4 with with a 26% chance, you will get $12 with a 35% chance and the rest of the time you will get $5. What is the expected value?
Suppose that there is a gamble for which there is a 46% chance that someone gets $17, otherwise they get $35. If you would prefer to receive a guaranteed $19 rather than the gamble, what is their risk premium?
