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Assume a stock market with only two assets: one risky, one risk-free. Assume two investors who are identical, except for their degree of risk aversion.

Assume a stock market with only two assets: one risky, one risk-free. Assume two investors who are identical, except for their degree of risk aversion. (Same wealth, same investment horizon, etc.) Investor A has a degree of risk aversion of 1.5, while investor B has a degree of risk aversion of 5.

Describe how their investment portfolio will differ.

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