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Utility Function |
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Utility function A mathematical expression that assigns a value to all possible choices. In portfolio theory, the utility function expresses the preferences of economic entities with respect to perceived risk and expected return. Utility Function The expression of desire in mathematical terms. Utility function is important in investing; it may show the usefulness of investing in some securities as opposed to different ones. For instance, a stock with low risk and a high return has a higher utility function than a stock with high risk and a low return. See also: Marginal Utility. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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