Figure 27-4

question 1

Multiple Choice

Figure 27-4.The figure shows a utility function for Alex.
-Refer to Figure 27-4.From the appearance of Alex's utility function,we know that

• A)if Alex owns a house,then he definitely would buy fire insurance provided the cost of the insurance was reasonable.
• B)Alex 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)Alex is risk averse.
• D)Alex is not risk averse.

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Definitions:

Average Score

The sum of all scores divided by the number of scores, used to determine a central or typical value in a set of data.

Months

Units of time, approximately 30 to 31 days in length, used to measure durations and organize the calendar year.

Solve

To find the solution or answer to a mathematical problem or equation.

Calculator

An electronic or software tool used for performing mathematical calculations, ranging from basic arithmetic to complex functions.