Problem 7.14 A financial services corporation is considering five alternative sites for moving its head office in the near future. Prelimi- nary assessments revealed varying expected and standard deviations of profit for each location as a result of variations in revenues gained from such a move and the associated costs incurred from renting these locations as follows: Site Alternatives Site A Site B Site D Expected Profit Standard Deviation of Profit (51000) 150 350 450 600 750 50 150 130 115 230 Use the following utility (L) function in terms of profit (P) to repre- sent the risk attitude of the corporation: U(P)-0.25P-0.0001p to plot the efficient frontier and utility curves for this investment situation and to recommend the optimal alternative. (Hint: Plot the standard deviation on the vertical axis as shown in Figure 7.9.) Problem 7.14 A financial services corporation is considering five alternative sites for moving its head office in the near future. Prelimi- nary assessments revealed varying expected and standard deviations of profit for each location as a result of variations in revenues gained from such a move and the associated costs incurred from renting these locations as follows: Site Alternatives Site A Site B Site D Expected Profit Standard Deviation of Profit (51000) 150 350 450 600 750 50 150 130 115 230 Use the following utility (L) function in terms of profit (P) to repre- sent the risk attitude of the corporation: U(P)-0.25P-0.0001p to plot the efficient frontier and utility curves for this investment situation and to recommend the optimal alternative. (Hint: Plot the standard deviation on the vertical axis as shown in Figure 7.9.)