The following statements about excepted utility theory are all equivalent except:
A) For all gambles an individual's certainty equivalent equals $0, x_{C E}=0$
B) $\mathrm{E}(\mathrm{u}(\mathrm{x}))=\mathrm{u}(\mathrm{E}(\mathrm{x}))$
C) The individual is risk averse.
D) The individual is risk-neutral.

Question

Quizplus · Accepted Answer

The individual is risk averse is not equivalent to the other statements because it is a specific case of excepted utility theory, while the other statements are more general.

The Following Statements About Excepted Utility Theory Are All Equivalent 0,xCE=00, x_{C E}=00,xCE​=0

The Following Statements About Excepted Utility Theory Are All Equivalent $0, x_{C E}=0$