Utility value

Utility value

The welfare a given investor assigns to an investment with a particular expected return and risk.

Utility Value

A subjective assessment of the expected return on an investment at a given risk. The utility value an investor assigns to a particular investment depends largely on the investor's risk tolerance. For instance, one investor may find that expected return X is appropriate for risk level Y, but a second investor may believe that X is too low for the riskiness.