As the chief investment officer for a money management firm specializing in taxable individual investors, you are trying to establish a strategic asset allocation for two different clients. You have established that Ms. A has a risk-tolerance factor of 8, while Mr. B has a risk-tolerance factor of 25. The characteristics for four model portfolios follow: ASSET MIXPortfolioStockBondER²18%92%7%5%222788936040915485151024

Calculate the expected utility of each prospective portfolio for each of the two clients. Do not round intermediate calculations. Round your answers to two decimal places. PortfolioMs. AMr. B1 2 3 4

Which portfolio represents the optimal strategic allocation for Ms. A? Which portfolio is optimal for Mr. B? Portfolio -Select-1234Item 9 represents the optimal strategic allocation for Ms. A. Portfolio -Select-1234Item 10 is the optimal allocation for Mr. B.

For Ms. A, what level of risk tolerance would leave her indifferent between having Portfolio 1 or Portfolio 2 as her strategic allocation? Round your answer to the nearest whole number.