Which of the Following Utility Functions Exhibits Constant Absolute Risk $U ( W ) = W - 0.5 W ^ { 2 }$

question 3

Multiple Choice

Which of the following utility functions exhibits constant absolute risk aversion?

• A)U(W)= W.
• B) \(U ( W ) = W - 0.5 W ^ { 2 }\)
• C)U(W)= ln W.
• D)U(W)= \(- e ^ { - W }\) .

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Definitions:

Obsessive-compulsive Disorder

A mental disorder characterized by recurring, unwanted thoughts (obsessions) and repetitive behaviors (compulsions) that the individual feels compelled to perform.

Major Depressive Disorder

A disorder related to mental health, defined by a continuous experience of feeling down or a diminished pleasure in tasks, resulting in major interference with daily routines.

Generalized Anxiety Disorder

A mental health disorder characterized by persistent and excessive worry about a number of different things.

Manic Episode

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