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Laura has the following utility function: U = r , where r denotes the return of the portfolio and represents the standard deviation of the
Laura has the following utility function: U = r , where "r" denotes the return of the portfolio and represents the standard deviation of the portfolio. Laura is currently investing in a portfolio that has 33% returns and a standard deviation of 10%.
Compute the Certainty equivalent for Laura (i.e., the amount of risk-free return that would make Laura indifferent between investing in the portfolio or getting the risk-free option)
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