Question: Suppose an individual faces the following lottery: 1) win $2000 with probability of 40%; 2) win $1000 with probability 40%; or 3) win $500...

Question:Suppose an individual faces the following lottery: 1) win $2000 with probability of 40%; 2) win $1000 with probability 40%; or 3) win $500 with probability 20%. Assume the individual's utility function can be given as follows:

U(x)= √(1.7x+150)

a) What is the individual's Risk Premium (RP) for this lottery?

b) Would you describe this individual as Risk Averse, Risk Seeking, or Risk Neutral? Explain.

Please show work!!