utility theory

(P8-43) Jason Scott (see Problem 8-42) has decided to incorporate utility theory into his decision with his mortgage application. The following table describes Jason’s utility function:

Monetary ValueUtility
-$48000.00
-$29000.10
-$24000.12
-$10000.15
-$5000.19
$00.21
$19000.26
$24000.30
$48001.00

(a) How can you best describe Jason’s attitude toward risk? Justify your answer.

(b) Will the use of utilities affect Jason’s original decision in Problem 8-42?

 
"Looking for a Similar Assignment? Order now and Get 10% Discount! Use Code "Newclient"