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Amy has a risk-aversion A=3. The risk-free rate is 6%. The risky portfolio has an expected return = 18% and variance=16%. What % of her

Amy has a risk-aversion A=3. The risk-free rate is 6%. The risky portfolio has an expected return = 18% and variance=16%. What % of her complete portfolio should she invest in the risky portfolio?

A) 7.5 %

B) 10.0 %

C) 12.5 %

D) 25.0%

E) None of the above

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