A Risk-Averse Person Has

question 51

Multiple Choice

A risk-averse person has

• A)a utility function whose slope gets flatter as wealth rises.This means they have increasing marginal utility of wealth.
• B)a utility function whose slope gets flatter as wealth rises.This means they have diminishing marginal utility of wealth.
• C)a utility function whose slope gets steeper as wealth rises.This means they have increasing marginal utility of wealth.
• D)a utility function whose slope gets steeper as wealth rises.This means they have diminishing utility of wealth.

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Definitions:

Return On Investment

A metric for assessing the effectiveness or profits from an investment, determined by dividing the net earnings by the investment's expense.

Performance Metrics

Performance metrics are quantifiable measures used to gauge an organization's performance in various areas, similar to the purpose of a performance measurement system but focused on specific measurable outcomes.

Nonfinancial Metrics

These metrics evaluate aspects of a business that aren't directly related to financial figures, such as customer satisfaction or employee turnover.

Financial Metrics

Quantitative measures used to assess the financial health, performance, and viability of a business or investment.