Given a Log Utility Function,a Risk-Averse Investor Will Favour an Asset

question 30

True/False

Given a log utility function,a risk-averse investor will favour an asset that pays $100 with certainty over an asset that pays $90 with certainty.

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Definitions:

What-if Questions

Hypothetical queries used to explore potential outcomes or scenarios, often in planning, problem-solving, and decision-making processes.

Play

A form of activity engaged in for enjoyment, relaxation, or educational purposes, often with rules and interactive elements.

Truth-wins Rule

A principle in group decision-making where the best argument or evidence available overwhelmingly persuades the group, leading to a consensus.

Majority-wins Rule

A decision-making strategy where the option chosen by the majority of participants is selected.