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An investor with mean-variance preferences is considering two portfolios. Portfolio A has an expected return of 14% and a standard deviation of 40%. Portfolio B
An investor with mean-variance preferences is considering two portfolios. Portfolio A has an expected return of 14% and a standard deviation of 40%. Portfolio B has an expected return of 7% and a standard deviation of 23%. What is the certainty equivalent of these portfolios, specifically for an investor with a level of risk aversion such that the investor is indifferent between portfolio A and portfolio B?
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