The correct answer is C because a client's ability (capacity) to take risk is determined by objective factors such as time horizon, expected income, and the level of wealth relative to liabilities.

• Option A is incorrect because the utility function reflects the client's willingness to take risk, not their ability. It measures the satisfaction derived from different investment portfolios.
• Option B is incorrect because the degree of risk aversion pertains to the client's willingness to take risk, which is a subjective factor based on their psychological preferences.

This distinction highlights the difference between willingness (subjective preference) and ability (objective capacity) when assessing an investor's financial risk tolerance.