Question
Financial economics Consider two investors who care only about the means and variances of their investments.Investor A is indifferent between portfolio 1 with expected return
Financial economics
Consider two investors who care only about the means and variances of their investments.Investor A is indifferent between portfolio 1 with expected return of 10% and standarddeviation of 15% and portfolio 2 with expected return of 18% and standard deviation of20%.Investor B is indifferent between portfolio 3 with expected return of 12% and portfolio4 with expected return of 15%, where the standard deviation of portfolios 3 and 4 are thesame as of portfolios 1 and 2, that is, equal to 15% and 20%, respectively. Which of the twoinvestors would you say is more risk-averse?
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