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(1.5] Consider the family ofexponential utility functions 1 exp[ow} 4! = . o ta} Show that o is the degree of absolute risk aversion. to}

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(1.5] Consider the family ofexponential utility functions 1 exp[ow} 4! = . o ta} Show that o is the degree of absolute risk aversion. to} Show that it becomes linear in to when it tends to zero thint: use L'Hopital's rule). to} Consider lottery i with positive and negative payoffs. Determine the value of E ut'j} when it tends to innity

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