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1. Cory has a coefficient of risk aversion of 1.9 and Bella has a coefficient of risk aversion of 3.1. They can both invest in

image text in transcribed 1. Cory has a coefficient of risk aversion of 1.9 and Bella has a coefficient of risk aversion of 3.1. They can both invest in a risky stock with an expected return of 14% and a variance of 9%, or a risky bond with an expected return of 8% and a variance of 7%. The coefficient of correlation between the returns on these two assets is 0.6 . a. If Cory had to put all his money into a single risky asset, which one would he choose? b. If Bella was trying to build the best possible risky portfolio, what investments would she make? c. Would Cory choose a different risky portfolio than Bella? Why or why not? d. If Cory could also invest in a riskless asset that returns 3.5%, what would be the composition of the best overall portfolio for him

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