A person who is risk-neutral has a utility function (with income on the horizontal axis and utility on the vertical axis)that,as income increases:
A) is horizontal.
B) is vertical.
C) has constant, positive slope.
D) is curved down.
E) is curved up.

Question

Quizplus · Accepted Answer

A risk-neutral person's utility function is linear, indicating a constant trade-off between risk and reward, which is represented graphically by a line with a constant, positive slope.

A Person Who Is Risk-Neutral Has a Utility Function (With