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Kamla is considering investing in two risky portfolios ABC and XYZ. She is an extremely risk averse investor and wants to invest in one risky-portfolio

image text in transcribedimage text in transcribed Kamla is considering investing in two risky portfolios ABC and XYZ. She is an extremely risk averse investor and wants to invest in one risky-portfolio OR both risky-portfolios. If she decides to construct a complete portfolio by choosing one risky portfolio and a risk -free asset, what will determine the risky portfolio choice for Kamla's investment? Kamla's risk-tolerance level Reward-to-variability ratio (Sharpe Ratio) Correlation between ABC and XYZ. Kamla is considering investing in two risky portfolios ABC and XYZ. She is an extremely risk averse investor and wants to invest in one of the risky portfolios with a risk-free asset. Once she has selected the risky portfolio, what characteristic will explain her allocation of wealth between the risky portfolio and risk-free asset in the complete portfolio? Risk tolerance Sharpe Ratio Asset riskiness

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