Figure 14-2

question 199

Multiple Choice

Figure 14-2. The figure shows a utility function for Mary Ann.
-Refer to Figure 14-2. From the appearance of the utility function, we know that

• A)if Mary Ann owns a house, she would not consider buying fire insurance.
• B)Mary Ann would prefer to hold a portfolio of stocks with an average return of 8 percent and a standard deviation of 2 percent to a portfolio of stocks with an average return of 8 percent and a standard deviation of 5 percent.
• C)Mary Ann would prefer to hold a portfolio of stocks with an average return of 8 percent and a standard deviation of 5 percent to a portfolio of stocks with an average return of 6 percent and a standard deviation of 3 percent.
• D)All of the above are correct.

---

Definitions:

Screening Opportunity

The process of evaluating business opportunities to determine their viability and potential for success.

Action Plan

A detailed outline of the steps, tasks, and resources required to achieve specific goals or objectives.

Overall Schedule

A comprehensive plan that outlines all planned activities and their timelines in a project or operation.

Economics

The social science that studies how individuals, governments, firms, and nations make choices on allocating resources to satisfy their wants and needs.