Explain the term utility function and uses
Explain the term utility function and uses.
Expert
The idea is not frequently used in practice in finance but is common in the literature, particularly economics literature. This utility function permits the ranking of the otherwise incomparable and it is used to describe people’s actions; rational people are supposed to act for that to increase their utility.
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Good fellow national bank decided to compete with a savings and loan by offering 30 year fixed rate mortgage loans at 8% annual interest. It plans to obtain the money got the loans by selling one year 6% CD to it's depositors. During first year of operation, good fellows sold it's depositors 1,000,0
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