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What kind of a risk attitude does a utility function with an upward sloping curvature indicate?
A. risk seeking
B. risk neutral
C. risk averse
D. risk mitigation
What kind of a risk attitude does a utility function with downward sloping curvature indicate?
A. risk mitigation
B. risk averse
C. risk seeking
D. risk neutral
Which of the following is one of the basic axioms on which the principle of maximum expected utility is based:
A. Stochastic dominance
B. Transportation of choice
C. Utility maximization
D. Cognitive bias
If x represents wealth, and u(x) its utility, then a logarithmic utility function can be represented by:
A. u(x) = ln(x)
B. u(x) = exp(x)
C. u(x) = ln(-x)
D. u(x) = 1/ln(x)
A utility function expresses:
A. Risk probabilities
B. Risk alternatives
C. Risk assessment
D. Risk attitude