Exponential Utility Has an Adjustable Parameter Called Risk Tolerance

question 6

Multiple Choice

Exponential utility has an adjustable parameter called risk tolerance. The risk tolerance parameter measures:

• A) how much money the decision maker has to spend
• B) the decision maker's attitude toward risk
• C) how much risk there is in a given decision
• D) the probability of an unfavorable outcome
• E) none of these choices

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