A Note on Dependence between a Venture and a Current Prospect

where X is a random variable representing a decision maker’s current prospect, Y is a random variable representing a possible venture, and y is his utility function for future wealth. The current prospect reflects the decision maker’s possible values of future wealth if he proceeds with his present plans, commitments, business undertakings, investments, etc. The venture Y is a prospective security purchase or sale, business deal, insurance policy, or other project that, if undertaken, may influence future wealth. If LY is the amount of the venture undertaken, X + LXY becomes the decision maker’s new pr0spect.l A represents possible emounts of the venture. A is determined by the circumstances of the particular venture under consideration. A purchase of common stock could be any nonnegative integral number of shares up to the limit of the decision maker’s resources. Stock options or commodity futures could be bought or sold so a could be