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Utility function |
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Definition of Utility functionUtility functionA mathematical expression that assigns a value to all possible choices. In portfolio theory the
Related Terms:Indifference curveThe graphical expression of a utility function, where the horizontal axis measures risk and Optimal portfolioAn efficient portfolio most preferred by an investor because its risk/reward characteristics Probability density functionThe probability function for a continuous random variable. Probability functionA function that assigns a probability to each and every possible outcome. UtilityThe measure of the welfare or satisfaction of an investor or person. Utility valueThe welfare a given investor assigns to an investment with a particular return and risk. functional classificationa separation of costs into groups based on the similar reason for their incurrence; it includes objective functionthe linear mathematical equation that Aggregate Production FunctionAn equation determining aggregate output as a function of aggregate inputs such as labor and capital. Consumption FunctionThe relationship between consumption demand and disposable income. More generally, it refers to the relationship between consumption demand and all factors that affect this demand. Replacement ValueCost of acquiring a new asset to replace an existing asset with the same functional utility.
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