risk averse investor makes decisions using a quadratic utility function: U(w) = w + dw2. 1.1 Derive an upper bound for d for this investor. 1.2 Explain why the investor can only use this utility function to make decisions over a limited range of wealth, w. The investor states that the upper limit of wealth where she can use this utility function is w=R1,000. 1.3 Determine the value of d in the investor’s utility function. The investor wins a prize of R250 in a game show. She is then offered the opportunity to exchange this prize for a larger prize of R600 if she can answer one more question correctly. However, she will receive no prize if she gets the question wrong. She estimates her chances of answering the question correctly to be 50%. 1.4 Determine whether the investor should take this opportunity to exchange.