Marvin Is an Expected Utility Maximizer

question 7

Multiple Choice

Marvin is an expected utility maximizer.He chooses his portfolio so as to maximize the expected value of 2,000,000x - x².If m is the mean of Marvin's income and s is the standard deviation, Marvin's income as a function of the mean and standard deviation is

• A)U = 2,000,000m -s².
• B)U = 2,000,000m - s.
• C)U= m - s/2,000,000.
• D)U = 2,000,000 + s.
• E)None of the above.

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Definitions:

Accountability

The obligation to be answerable for one's actions, ensuring responsibility is accepted and mistakes are rectified.

Management

The process of dealing with or controlling things or people, often within an organization, including planning, decision making, organizing, leading, and controlling.

Motivation

Stimulation and inspiration to move; the leadership task of mobilizing people with different ideas, skills, and values to achieve a common mission; the experience of physical and emotional needs, progressing from basic needs for survival and security, to social needs for belonging and respect, to the complex need for fulfillment. See energize and empowerment.