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3. Suppose the average retum of the S&P 500 over the last 50 years has been 78% with a standard deviation of 20% per year.

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3. Suppose the average retum of the S\&P 500 over the last 50 years has been 78% with a standard deviation of 20% per year. Also assume the risk free rate is 3.5% a. Find the optimal weight of the risky asset in a complete portfolio for an individual with a risk aversion coefficient of 2.5. Additionally calculate the return, standard deviation and utility for the following portfolios. Weight lindex =1 Weight joder =.75 Weight iese =35 Weight was =0

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