What kind of utility function of wealth might be consistent

Assignment Help Financial Management

Reference no: EM131245438

What kind of utility function of wealth might be consistent with an individual gambling and paying insurance at the same time?

Suppose that A>B>C>D and that the utilities of these alternatives satisfy U(A) + U(D) = U(B) + U(C).

Is it true that U(-B + is greater than U(4/1 + +D) because the former has a smaller variance? Why or why not?

Reference no: EM131245438

Questions Cloud

How much will you pay to avoid this risk : How much will you pay to avoid this risk if your current level of wealth is $10,000? - How much would you pay if your level of wealth were $1,000,000?

Does the function exhibit positive marginal utility : Given the exponential utility function U(W) = - a) Graph the function, assuming a > 0. - Does the function exhibit-positive marginal utility and risk aversion?

Draw cash-?ow diagram from the companys viewpoint : It is estimated that a certain piece of equipment can save $22,000 per year in labor and materials costs. The equipment has an expected life of ?ve years and no market value. If the company must earn a 15% annual return on such investments, how much ..

What is needed is a dictionary of free lists : A major design consideration is how to organize the collection of free lists, which are distinguished by the length of the strings. Essentially, what is needed is a dictionary of free lists, organized by string lengths.

What kind of utility function of wealth might be consistent : What kind of utility function of wealth might be consistent with an individual gambling and paying insurance at the same time?

What is the size of governemnt surplus or deficit : Suppose that the government decides to impose an income tax as opposed to "lump sum" tax. We can now model the conomy as follows. What is the size of governemnt surplus or deficit in this case? What is the fiscal multiplier in this case?

Art as an important component of a culture : ANTH 1001 - INTRODUCTION TO ANTHROPOLOGY - Why is art an important component of a culture and the reason why art is an important component of a culture is that art preserves our heritage, and art is a tool for the dissemination of culture. Meanwhil..

What is the maximum amount she will pay : What is the maximum amount she will pay for insurance if she has a logarithmic utility function? compute the cost of the gamble.

Recursive function that returns the height of a binary tree : Assume that a given BST stores integer values in its nodes. Write a recursive function that sums the values of all nodes in the tree.

User Account

All Pages