(b) An investor's utility function is given by: U(w) = In(w 2 ) where w is the investor's level of wealth. %3D For this investor: (i) show that their marginal utility is positive. (ii) determine their risk preference
(b) An investor's utility function is given by: U(w) = In(w 2 ) where w is the investor's level of wealth. %3D For this investor: (i) show that their marginal utility is positive. (ii) determine their risk preference
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![(b) An investor's utility function is given by: U(w) = In(w 2 ) where w is the investor's level of wealth.
For this investor:
(i) show that their marginal utility is positive.
(ii) determine their risk preference](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F23cdc0d7-7d33-42d3-8fb9-b8ab1ea99c34%2F08662a61-fa7a-4487-ad41-02fb7480f3a8%2Fh8jei3di_processed.jpeg&w=3840&q=75)
Transcribed Image Text:(b) An investor's utility function is given by: U(w) = In(w 2 ) where w is the investor's level of wealth.
For this investor:
(i) show that their marginal utility is positive.
(ii) determine their risk preference
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