The $\beta$ in the lifetime utility function represents:
A) expected future wealth
B) the risk parameter
C) any number greater than one
D) the amount of future discount
E) life expectancy

Question

Quizplus · Accepted Answer

In the context of lifetime utility functions, $\beta$ typically represents the discount factor, which reflects how future utility is valued relative to present utility. It is usually a number between 0 and 1, indicating the degree to which future utility is discounted.

The β\betaβ In the Lifetime Utility Function Represents: A) Expected Future Wealth

The $\beta$ In the Lifetime Utility Function Represents:
A) Expected Future Wealth