### Explain how many coupons would it is rational

##### Reference no: EM1310523

Q. Clancy has \$1,200. He plans to bet on a boxing match between Sullivan also Flanagan. For \$4, he can buy a coupon that pays \$10 if Sullivan wins also nothing otherwise. For \$6 he can buy a coupon that will pay \$10 if Flanagan wins also nothing otherwise. Clancy doesn't agree with these odds. He thinks that the two fighters every have a probability of winning. If he is an expected utility maximize who tries to maximize the expected value of ln W, where ln W is the natural log of his wealth, Explain how many coupons would it is rational for him to buy?

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