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detailed answer 3. An investor has a utility function u=E(rp)0.5Ap2 where A is the risk aversion parameter and A=3.5. Assume the average annual return on
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3. An investor has a utility function u=E(rp)0.5Ap2 where A is the risk aversion parameter and A=3.5. Assume the average annual return on the risky asset is E(rp)= 11% and the return on the risk-free asset is rr=5%, solve for the investor's optimal allocation between the risky and the risk-free asset Step by Step Solution
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