The expected utility from an investment is defined as _____.
A)the summed value of each possible utility weighted by its probability
B)the expected returns from an investment weighted by its risk.
C)the expected probability of high returns on an investment
D)the summed value of each possible rate of return discounted for inflation

Question

Quizplus · Accepted Answer

The definition of expected utility is the summed value of each possible utility (or outcome) weighed by its probability. This takes into account both the potential gains and losses of an investment as well as their likelihoods.

The Expected Utility from an Investment Is Defined as _____