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Given the utility function U = E(r) 0.5A2 and the fact that T-bill offer a risk-free rate of 4%, what is the minimum value for
Given the utility function U = E(r) 0.5A2 and the fact that T-bill offer a risk-free rate of 4%, what is the minimum value for the risk-aversion coefficient A where an investor prefers the T-bills to an investment returning 10% with a standard deviation of 18%? (Hint: T-bills are risk-free)
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