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  3. a risk-averse agent has a positive utility over a

A risk-averse agent has a positive utility over a risky investment. We double both the...

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Finance

A risk-averse agent has a positive utility over a risky investment. We double both the expected return and the variance of the investment option. The agent ...

Has a higher utility now because the higher return is more favorable than the risk.

None of the statements is correct.

Has the same utility because both the return and the risk are doubled and offset each other.

Has a lower utility because the new level of risk dominates the increased return.

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