Solved: Arrow-pratt measure of absolute risk-aversion, Macroeconomics

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Arrow-pratt measure of absolute risk-aversion

Question:

This is a classic graduate/advanced undergraduate level problem in microeconomics/finance. It asks to calculate utility function that corresponds to a constant Arrow-Pratt measure of absolute risk-aversion.

Here's a problem from Mas-Colell, Whinston and Green textbook on Microeconomic Theory:

Given that the Arrow-Pratt measure of absolute risk-aversion is a constant, derive the corresponding form of the von Neumann-Morgenstern utility function.

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Macroeconomics: Arrow-pratt measure of absolute risk-aversion

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