Multiple Choice
A portfolio has an expected rate of return of 0.15 and a standard deviation of 0.15.The risk-free rate is 6 percent.An investor has the following utility function: U = E(r) - (A/2) s2.Which value of A makes this investor indifferent between the risky portfolio and the risk-free asset?
A) 5
B) 6
C) 7
D) 8
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
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