Question 1 1/1 pts An investor maximises expected utility E(U) E(rp) 0.5Aowhere 7p is the portfolio return and on is the portfolio variance. The investor forms a fully invested portfolio from two risky assets, X and Y, where the average return on X is 0.07 and the average return on Y is 0.1. The variance of the return on X is 0.16 and the variance of the return on Y is 0.25. The returns on X and Y are uncorrelated. What is the weight on X in the investor's optimal portfolio to two decimal places with the coefficient of risk aversion, A, is equal to 6? 0.50 1.00 0.70 0.00 Correct! 0.60 Question 8 1/1 pts An investor has an expected utility function E(U) = E(r) 40where r is the rate of return and is its variance. The investor can form a portfolio consisting of a risk free asset with a rate of return of 4% and a risky asset with an expected return of 7% and a return standard deviation of 6%. What would be the fraction of the portfolio invested in the risk free asset? Correct! 11/12 1/12 1 0 0 1/2