Assume an investor with the following utility function: U = 2E(r) - (A/4)^ 2

a. A portfolio has an expected rate of return of 0.25 and a standard deviation of 0.25. The risk-free rate is 4%. Which value of A makes this investor indifferent between the risky portfolio and the risk-free asset?

b. If A =3 for question (a) above, what is the optimal allocation of your investment fund between risky and riskless assets.