Briefly discuss expected utility theory of decision-making

Expected utility theory (EUT) is a fundamental concept in financial economics and decision theory that provides a framework for understanding how individuals make choices under uncertainty. It was developed in the early 20th century, primarily by economists John von Neumann and Oskar Morgenstern, and has since become a cornerstone in both economic theory and practical applications in finance.

At its core, expected utility theory posits that individuals make decisions by considering the potential outcomes of their choices and the probabilities associated with these outcomes. Instead of focusing solely on the monetary value of outcomes, EUT emphasizes the concept of utility, which reflects an individual's preferences and satisfaction derived from different outcomes. This approach allows for a more comprehensive understanding of decision-making under risk, as it __________ _____ ________ _____ ________ ________ _____ __________ ___.
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