Expected Income and Utility, Lottery Preference, Risk Aversion and Optimal Saving

This document covers expected income and utility, lottery preference, risk aversion, and optimal saving. It includes calculations and explanations for each topic. The expected income and utility calculations are shown for three different lotteries. The document also discusses the best preferred lottery. The concept of risk aversion is explained, and the optimal investment in a risky asset is calculated. The document also covers the relationship between utility functions and risk aversion. Finally, the optimal saving under different conditions is discussed.