5.2 Preferences Toward Risk Expected utility-Sum of the utilities associated with all possible outcomes,weighted by the probability that each outcome will occur. Risk averse-Preferring a certain income to a risky income with the same expected value. Risk neutral-Being indifferent between a certain income and an uncertain income with the same expected value. Risk loving-Preferring a risky income to a certain income with the same expected value.➢ Expected utility-Sum of the utilities associated with all possible outcomes, weighted by the probability that each outcome will occur. ➢ Risk averse-Preferring a certain income to a risky income with the same expected value. ➢ Risk neutral-Being indifferent between a certain income and an uncertain income with the same expected value. ➢ Risk loving-Preferring a risky income to a certain income with the same expected value. 5.2 Preferences Toward Risk