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A client is considering two investments: 1) a portfolio with a return = 12% and risk = 25% and 2) US Treasury Bills with a
A client is considering two investments:
1) a portfolio with a return = 12% and risk = 25%
and
2) US Treasury Bills with a return = 5%.
What risk aversion coefficient (A) would make the client indifferent between the two investment alternatives?
Group of answer choices
2.8
5.6
1.12
Undefined - the investor would always select the riskier portfolio
2.24
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