Business, 18.01.2021 14:00 ashtonfordham987
Nina has a convex utility of wealth function, u(x). She is contemplating two prospects, L and M, where L is a mean preserving spread of M. Which of the following statements is therefore true?
a. Nina will prefer M to L.
b. Nina will prefer L to M.
c. Ninaâs ranking of L and M cannot be determined without more information.
d. Nina must be risk averse, but that is the most one can say.
Answers: 1
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Nina has a convex utility of wealth function, u(x). She is contemplating two prospects, L and M, whe...
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