I have this information:Suppose the t=4 cash flow from a project can take on only two values: W11W2221
=$55(in Event) or =$405 (in Event). The probability of Event is three times that of Event.
Suppose further that the utility function that takes into account the risk-aversion of the market as a whole is given by U(W) ≡ Ln(W).
I need to compute the risk-neutral probabilities of Event1 and Event2.
Can somebody guide me how to do it, please?
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