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Assume an investor with the following utility function: U = E(r) - 0.61(s^2). To maximize her expected utility, which one of the following investment alternatives
Assume an investor with the following utility function: U = E(r) - 0.61(s^2). To maximize her expected utility, which one of the following investment alternatives would she choose?
A portfolio that pays 12% with 60% probability or 5% with 40% probability
A portfolio that pays 12% with 40% probability or 5% with 60% probability
U(c) = ?
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