What must be true about the sign of the risk aversion coefficient, A, for a risk lover? Draw the indifference curve for a utility level of .02 for a risk lover.

For Problems 10 through 12: Consider historical data showing that the average annual rate of return on the S&P 500 portfolio over the past 95 years has averaged roughly 8% more than the Treasury bill return and that the S&P 500 standard deviation has been about 20% per year. Assume these values are representative of investors’ expectations for future performance and that the current T-bill rate is 2%. p-936