A Decision Maker Whose Utility Function Graphs as a Straight

question 13

Multiple Choice

A decision maker whose utility function graphs as a straight line is

• A)conservative.
• B)a risk taker.
• C)risk neutral.
• D)a risk avoider.

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Definitions:

Fixed Cost

Overhead expenses that remain constant regardless of the volume of goods or services produced by a business.

Sales Commissions

A form of payment to a salesperson for services rendered, which is often calculated as a percentage of the sales they have generated.

Chief Financial Officer

The senior executive responsible for managing the financial actions of a company, including financial planning, management of financial risks, and financial reporting.

NPV

A financial metric used to assess the profitability of an investment by calculating the present value of expected future cash flows.