how did i find the 0.01125A

1/A portfolio has an expected rate of return of 0.15 and a standard deviation of 0.15. The risk-free rate is 6%. An investor has the following utility function: U = E(T) - (A/2)s 2. Which value of A makes this investor indifferent between the risky portfolio and the risk- free asset? A) 5 I B) 6 C) 7 D) 8 Answer: D 0.06 = 0.15-A/2(0.15) 2 0.06-0.15 = -A/2(0.0225) -0.09 = -0.01125A A=8