Rahul has a concave utility function. Therefore, if there are two choices, he will pick the ________ if ________ expected value.
A)fair bet; both have the same
B)less risky choice; both have the same
C)more risky choice; both have the same
D)less risky choice; it has a lower

Question

Quizplus · Accepted Answer

A concave utility function indicates risk aversion. Therefore, if two choices have the same expected value, a risk-averse individual like Rahul would prefer the less risky option.

Rahul Has a Concave Utility Function