Let the utility function of a person be u(x) = e ax , a > 0. Graph
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Let the utility function of a person be u(x) = eax, a > 0. Graph it. Is the person a risk averter or a risk lover? Show that in this case, the results of the comparison of risky alternatives does not depend on the initial wealth and has the additivity property for certain equivalents.
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The function is convex and hence the individual is a risk lover Next similar ...View the full answer
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