Summary: 1. You may use an 8.5x11 page of notes and a calculator.
2. Tear off this sheet and use it to keep your answers covered at all times. If you need more scratch paper, I have
3. Write your name on the back of the test by the staple to facilitate returning the exams. Do not write your name
on the front of the exam.
4. No question is meant to have a syntax error. If it does, fix it or ask me how I want the error resolved.
5. You are graded not only on the correct answer, but also the best answer.
6. Look at the number of points a problem is worth in deciding how much time to spend answering it. A
question with five points probably doesn't warrant three pages of proof (unless you have finished answering
7. The amount of space provided is an indication of how much room I needed to answer the question.
Multiple Choice (3 points) Pick the single best answer.
1. A risk averse agent is given the following choices for deals.
Deal 1: $49 guaranteed
Deal 2: $100 with probability .5 and 0 otherwise
Deal 3: $75 with probability .7, 16 otherwise
Deal 4: $200 with probability .2 and 0 otherwise
Which would he select