Question
A portfolio has an expected rate of return of 0.12 and a standard deviation of 0.12. the risk-free rate is 6 percent. An investor has
A portfolio has an expected rate of return of 0.12 and a standard deviation of 0.12. the risk-free rate is 6 percent. An investor has the following utility function U=E(r)-(A/2)S^2 Which value of A makes this investor indifferent between the risky portfolio and the risk-free asset? 5 or 4 or 3 or7 or 6 or 8 or 1
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Fundamentals of Corporate Finance
Authors: Berk, DeMarzo, Harford
2nd edition
978-0132148238
