Figure 19-4

question 92

Multiple Choice

Figure 19-4.The figure shows a utility function for Dexter.
-Refer to Figure 19-4.From the appearance of the utility function,we know that

• A) Dexter is risk averse.
• B) Dexter gains less satisfaction when his wealth increases by X dollars than he loses in satisfaction when his wealth decreases by X dollars.
• C) the property of diminishing marginal utility does not apply to Dexter.
• D) All of the above are correct.

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Definitions:

Liquidity Preference Theory

The theory that investors prefer to have their resources in liquid forms, influencing interest rates and financial market behavior.

Yield

The income return on an investment, typically expressed as a percentage, indicating the interest or dividends received.

Long-Term Corporate Bonds

Bonds issued by corporations with maturities longer than ten years, offering fixed interest payments.

Eurobonds

Bonds issued in a currency other than the currency of the country or market in which it is issued, often used by companies to raise capital in foreign markets.