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Plz give me the explainations in very detail can't understand it, better to illustrate step by step thanks You are a risk-averse investor. Portfolio A
Plz give me the explainations in very detail can't understand it, better to illustrate step by step thanks
You are a risk-averse investor. Portfolio A has E(r) = 12% and = 18%. Portfolio B has = 21%, and has end-of-year cash flows of either $84,000 or $144,000 with equal probability. At what price for portfolio B would you be indifferent between A and B?
A. | $100,000 |
B. | $101,786 |
C. | $84,000 |
D. | $121,000 |
E. | None of these |
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