Certainty Equivalent and Risk Premium in terms of Rates of Return

This video goes through the certainty equivalent and risk premium concepts we discussed in the last video but in terms of rates of return. We discuss the concept of a rate of return and compute for these using an actual example using calculus.
Created by Justin S. Eloriaga

[@이숙영학생농경제사회]

Hello, I might be wrong but isn't E(z) 0.05 for the first exercise question?

[@StephaneHamayon]

=0.5*(0.2)+0.5*(-0.1)=0.05 ! Justin wrote = 0.10 !