question archive This question is about risk management
This question is about risk management
Subject:FinancePrice: Bought3
This question is about risk management. I don't know how to deal with the question (c). Is it objective or subjective to answer the " how do you interpret this result"? (Objective means answering this question depends on whether you are a risk taking person or not) Can I use E(x) to compare them and choose the larger one? And there is another question not related to this exercise but I'm confused about it. The question is: if a person's ulitily function's first derivative is positive and the second derivative is negative, can I say he is risk averse, which means he will choose to avoid risk instead of taking it? Thanks!
