Multiple Choice
Figure 14-3. The figure shows a utility function for Rob. 
-Refer to Figure 14-3. From the appearance of Rob's utility function, we know that
A) if Rob owns a house, then he definitely would buy fire insurance provided the cost of the insurance were reasonable.
B) Rob would voluntarily exchange a portfolio of stocks with a high average return and a high level of risk for a portfolio with a low average return and a low level of risk.
C) Rob is risk averse.
D) Rob is not risk averse.
Correct Answer:
Verified
Correct Answer:
Verified
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