Determine the utility function of lifetime wealth

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Suppose you have been accepted by two colleges, A and B.

A is a much more demanding and also a more prestigious institution than B. B is a safe option in the sense that you know you will do reasonably well academically there, and that after graduation you will land an "adequate" job. If you manage to survive academically at A, you will land a "great" job (60% probability); but it is also possible that you will do poorly there, in which case you will end up in a "bad" job (40% probability). The following chart shows the lifetime wealth levels for each type of job and the corresponding probabilities. If your utility function of lifetime wealth , which college should you attend?

Reference no: EM13208296

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