Figure 27-3

question 7

Multiple Choice

Figure 27-3.The figure shows a utility function for Rob.

-Refer to Figure 27-3.From the appearance of Rob's utility function,we know that

• A)if Rob owns a house,then he definitely would buy fire insurance provided the cost of the insurance were reasonable.
• B)Rob would voluntarily exchange a portfolio of stocks with a high average return and a high level of risk for a portfolio with a low average return and a low level of risk.
• C)Rob is risk averse.
• D)Rob is not risk averse.

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Definitions:

Compliance

Compliance refers to the act of adhering to laws, regulations, standards, and ethical practices set by authoritative bodies or organizations.

Proactive Social Responsibility

A business approach where companies take the initiative to improve social welfare, beyond regulatory requirements.

Adverse Social Impacts

Negative effects on society that may result from certain actions or policies, such as increased inequality or damage to community cohesion.

Discretionary Responsibilities

Obligations that an individual or organization chooses to undertake voluntarily, beyond what is legally or contractually required.