The Parameter R in the Exponential Utility Function U(x) =

Multiple Choice

The parameter R in the exponential utility function U(x) = 1 - e^-x/R represents the decision maker's risk tolerance. Larger values of R indicate that the decision maker

A) is less risk averse (closer to neutral) .
B) is more risk averse (has less risk tolerance) .
C) is not concerned with risk.
D) will accept the gamble.