Investors preferences toward the expected return and volatility of a portfolio may be expressed by a utility

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Investors’ preferences toward the expected return and volatility of a portfolio may be expressed by a utility function that is higher for higher expected returns and lower for higher portfolio variances. More risk-averse investors will apply greater penalties for risk. We can describe these preferences graphically using indifference curves. p-936

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ISE Investments

ISBN: 9781266085963

13th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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