06 Jan (a) Discuss how a utility function can be assessed
(a) Discuss how a utility function can be assessed. What is a standard gamble and how is it used in determining utility values?(b) Alan Barnes invests primarily in the share market. Recently he has become concerned about the share market as a good investment. During the next year he must decide whether to invest $10,000 in the share market or in a government bond at an interest rate of 9%.Alan expects the share market to be good, fair or bad, giving a return of 14%, 8% or 0% respectively on his money.