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a girl is given $15 by her parents. she has two options of how to spend the money. she can either save the money for future purchases or she can start a lemonade stand on her driveway. if she spends her $15 on the lemonade stand, there is a 50% probability she will lose $10 and a 50% probability she will make $12. assuming the girl has a square root utility function, what should the girl do with the money?

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sarcasmislife

Well from a logical stand point the girl should save the money for future purchases. But then the money will stay stagnant. But if she were to buy the lemonade stand there would be a greater risk than just keeping the money, but on the other hand there would be a greater reward. In mula!!! :) Which choice do you think is the best? Because the decision is entirely up to you...

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