An Individual Is Said to Be Risk- Averse If

question 44

Multiple Choice

An individual is said to be risk- averse if:

• A)w₁ is preferred with certainty to a gamble expected to payoff w₁.
• B)the utility function exhibits increasing marginal utility of wealth.
• C)the utility function exhibits constant marginal utility of wealth.
• D)prefer all certain prospects over a particularly risky prospect.

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Definitions:

Resistance

A measure of the opposition to the flow of electric current, expressed in ohms (Ω).

Electromotive Force

A difference in potential that drives electric current from one point to another, measured in volts.

Voltage

The electrical potential difference between two points in a circuit, driving the flow of current.

Horsepower

A measure of power for electric and mechanical devices.