An analysis of heterogeneous utility benchmarks in a zero return environment

The utility of an investor should be based on an acceptable loss in the loss region and a target return in the gain region of a set of investment opportunities. The level of these benchmarks will unveil an opportunity cost, break-even effect, or indifference when the return of an investment equals zero. This condition has been arbitrarily assumed away for continuity and other simplification purposes over the past few decades. Historically,...