Definition 6.C2: Given a utility function o the certainty equivalent of F( denoted c(F, U is the amount of money at which the individual is indifferent bewteen the gamble F( and the certain amount c(F, u) e (c(F,)=∫(x)dr(x) (i For any fixed amout of money x and positive number e the probability premium denoted by T(x, a, u is the excess in winning probability over the odds that makes the individual indifferent between the certain outcome x and a gamble between the outcomes x +8 andx-aDefinition 6.C.2: Given a utility function u(.): (i) the certainty equivalent of F(.) denoted c(F,u) is the amount of money at which the individual is indifferent bewteen the gamble F(.) and the certain amount c(F, u), i.e. ucF, u   uxdFx (ii) For any fixed amoutn of money x and positive number  the probability premium denoted by x, ,u is the excess in winning probability over the odds that makes the individual indifferent between the certain outcome x and a gamble between the outcomes x   and x  