Business
Business, 15.04.2020 17:35, jamilamiller200

A portfolio has an expected rate of return of 0.10 and a standard deviation s of 0.20. The risk-free rate is 0.05. Ron 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. 6
b. 2.5
c. 4
d. 3.5

answer
Answers: 1

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A portfolio has an expected rate of return of 0.10 and a standard deviation s of 0.20. The risk-free...

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