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Question 3 (7 Marks) Investments Plan A B Expected Return, E(r) 0.20 0.24 0.28 0.32 Standard Deviation, 0.5 0.7 0.18 0.23 C D Utility function

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Question 3 (7 Marks) Investments Plan A B Expected Return, E(r) 0.20 0.24 0.28 0.32 Standard Deviation, 0.5 0.7 0.18 0.23 C D Utility function U = E(r) 1/2A02 Based on the above utility function, which investment plan would Sarah choose if she was risk averse with A =5? WH is the importance of "A" in the utility fun on? Show all your calculations. 7 marks

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