For a risk-averse individual,with return on the X-axis and total utility on the Y-axis,the slope of the total utility curve:
A)increases at an increasing rate.
B)has a constant slope.
C)increases at a decreasing rate.
D)is always negative.

Question

Quizplus · Accepted Answer

A risk-averse individual tends to have diminishing marginal utility for additional expected return, which means that the slope of the total utility curve increases at a decreasing rate. This reflects the concept of decreasing marginal utility.

For a Risk-Averse Individual,with Return on the X-Axis and Total