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2. Suppose that two investments have the same three payoffs, but the probability associated with each payoff differs, as illustrated in the table below: Probability
2. Suppose that two investments have the same three payoffs, but the probability associated with each payoff differs, as illustrated in the table below: Probability (Investment A) Probability (Investment B) Payoff (SEK) 3500 0.20 0.40 3000 0.70 0.30 2500 0.10 0.30 a. Find the expected return and standard deviation of each investment. b. Jill has the utility function U= 51, where I denotes the payoff. Which investment will she choose? Ken has the utility function U=5/1. Which investment will he choose? d. Laura has the utility function U= 51. Which investment will she choose? C
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