Certainty equivalent
= Certainty equivalent
{title2=$c$}
A deterministic wealth level $c$ satisfying $U(c)=\mathbb E U(W)$. For normal wealth with <exponential utility> $U(x)=-e^{-\gamma x}$ it is $c=\mathbb EW-\gamma\operatorname{Var}(W)/2$.
= Certainty equivalent
{title2=$c$}
A deterministic wealth level $c$ satisfying $U(c)=\mathbb E U(W)$. For normal wealth with <exponential utility> $U(x)=-e^{-\gamma x}$ it is $c=\mathbb EW-\gamma\operatorname{Var}(W)/2$.