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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
utility function
a function denoting the quantities of goods and services that an individual consumes, of the form:

where Ut = total utility and x1 ,x2 . products consumed.
In order to achieve CONSUMER EQUILIBRIUM, the individual will select a combination of products, in line with his preferences, that maximizes his TOTAL UTILITY from his given income. See
CARDINAL UTILITY, ORDINAL UTILITY, MARGINAL UTILITY utility maximization see CONSUMER EQUILIBRIUM.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005