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Homework answers / question archive / All the following statements about the Utility Function are true except: a) the function for the risk-neutral decision maker is always linear b) the Utility function for money is always upward sloping c) different kinds of decision-makers will have different slopes d) the Utility Function reflects objective attitudes about risk

All the following statements about the Utility Function are true except: a) the function for the risk-neutral decision maker is always linear b) the Utility function for money is always upward sloping c) different kinds of decision-makers will have different slopes d) the Utility Function reflects objective attitudes about risk

Economics

All the following statements about the Utility Function are true except:

a) the function for the risk-neutral decision maker is always linear

b) the Utility function for money is always upward sloping

c) different kinds of decision-makers will have different slopes

d) the Utility Function reflects objective attitudes about risk

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The correct answer is d) the Utility Function reflects objective attitudes about risk.

  • This is simply not true. The Utility function does not reflect attitude about risk but rather the impact on risks on financial decisions made.