If Cara's Utility Falls More by Losing $600 Than It

question 106

Multiple Choice

If Cara's utility falls more by losing $600 than it rises by gaining $600,she has

• A)increasing marginal utility of wealth and is risk averse.
• B)increasing marginal utility of wealth but is not risk averse.
• C)decreasing marginal utility of wealth and is risk averse.
• D)decreasing marginal utility of wealth but is not risk averse.

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Definitions:

Cash Dividend

A cash dividend is a payment made by a company out of its earnings to shareholders in the form of cash.

Stockholders Equity

The residual interest in the assets of a corporation after deducting liabilities, representing ownership value.

Assets

Economic resources owned by a business or individual that are expected to provide future benefits.

Par Value

The face value of a bond or stock as stated by the issuer, which bears importance in the legal capital of a company.