Question: An individual s utility function is ( ) where is her uncertain income, and is increasing and concave. Which of the following statements is correct?
An individuals utility function is where is her uncertain income, and is increasing and concave. Which of the following statements is correct? a she exhibits decreasing absolute risk aversion whenever b she exhibits decreasing absolute risk aversion if she is prudent c she exhibits decreasing absolute risk aversion if d she exhibits decreasing absolute risk aversion only if she is prudent
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