In expected utility formula A doesn’t stand for a risk aversion based on a scale from 1 to 10?
If you have a scale from 1 to 8, let’s say 6 you should use 6 or 7.5 in the formula?
Where is this questions coming from? If you have been given a risk aversion figure just put it in the appropriate formula. Have not seen an occasion where it should be scaled in some way?
I agree with Mercutio. especially because you’re comparing two investments using the same scale so why would you adjust both of them to get the same end result anyway (A is better than B because…) Just use what they give you.