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Bob is your clients and you advise him in his portfolio selections and investment decisions. According to your analysis, Bob has a degree of risk
Bob is your clients and you advise him in his portfolio selections and investment decisions. According to your analysis, Bob has a degree of risk aversion of 3.1. The risk-free rate is currently 2%, the expected return on the market portfolio is 8.7%, and the volatility of the market portfolio is 19%.
Advise Bob on his optimal capital allocation by giving the weight (in percentage) to put in the risky market portfolio.
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