II. Risk Aversion 1. Define the concept of risk aversion. 2. Consider the following common examples of utility functions, where Y denotes wealth, and a, b, are constant parameters: a) u(Y)=a+bY,b>0 b) w(Y)=a+bY +cY%c0 d) w(Y)=-eY,a>0 e) u(Y)=-Y"2Y >0,a>0 Show whether each function exhibits increasing, constant, or decreas- ing absolute and relative risk aversion. Note: we require u/(Y) > 0 to describe preferences of an individual who prefers more money to less