Figure 14-3. The figure shows a utility function for Rob.
-Refer to Figure 14-3. If most people's utility functions look like Rob's utility function, then it is easy to explain why
A)people buy various types of insurance.
B)we observe a trade-off between risk and return.
C)most people prefer to hold diversified portfolios of assets to undiversified portfolios of assets.
D)None of the above are correct.

Question

Figure 14-3. The figure shows a utility function for Rob. 
-Refer to Figure 14-3. If most people's utility functions look like Rob's utility function, then it is easy to explain why
A)people buy various types of insurance. 
B)we observe a trade-off between risk and return. 
C)most people prefer to hold diversified portfolios of assets to undiversified portfolios of assets. 
D)None of the above are correct.

Quizplus · Accepted Answer

The Answer of Figure 14-3. The figure shows a utility function for Rob. 
-Refer to Figure 14-3. If most people's utility functions look like Rob's utility function, then it is easy to explain why
A)people buy various types of insurance. 
B)we observe a trade-off between risk and return. 
C)most people prefer to hold diversified portfolios of assets to undiversified portfolios of assets. 
D)None of the above are correct.