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1.An investor is indifferent between investing 10% and 110% in a risky portfolio with E(r)=15% and standard deviation of 30% and a risk free T-bill
1.An investor is indifferent between investing 10% and 110% in a risky portfolio with E(r)=15% and standard deviation of 30% and a risk free T-bill yielding 3%. What is the investors risk aversion?
Provide your answer rounded to two digits.
2.. Mary's risk aversion is 1.9. What percent of her savings should she invest in a portfolio with E(r)=17% and standard deviation of 23%, if the risk free rate to invest in is 3.5% and the rate at which money can be borrowed is 5.7%?
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