7. Assume that an investor's utility function is U(W) a + becW where (a) a, b, c,...
Question:
7. Assume that an investor's utility function is U(W) a + becW where
(a)
a, b,
c, are constants, and
(b) W is wealth. Assuming that the investor prefers more to less and is risk averse, what can be said about the sign of
a, b, c? What are the properties of this utility function in terms of absolute and relative risk aversion ?
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Related Book For
Modern Portfolio Theory And Investment Analysis
ISBN: 9780471007432
5th Edition
Authors: Edwin J. Elton, Martin Jay Gruber
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