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Question 6 (2 points) Your grandmother (G) and younger sibling (S), who is less risk averse than your grandmother, turn to you for investment advice.
Question 6 (2 points) Your grandmother (G) and younger sibling (S), who is less risk averse than your grandmother, turn to you for investment advice. They are only able to invest in a risk-free Treasury bill, Home Depot stock and Pfizer stock. Pfizer stock has a higher standard deviation than Home Depot but it also offers a higher expected return. They each want to invest $1000. Only one of the four answers below is consistent with an optimal portfolio for G and an optimal portfolio for S. Which one? a. Ginvests $800 in the risk-free asset, $75 in Home Depot, and $125 in Pfizer. Sinvests $200 in the risk-free asset, $300 in Home Depot, and , $500 in Pfizer b. Ginvests $200 in the risk-free asset, $300 in Home Depot, and $500 in Pfizer. Sinvests $200 in the risk-free asset, $300 in Home Depot, and , $500 in Pfizer c. Ginvests $800 in the risk-free asset, $125 in Home Depot, and $75 in Pfizer. Sinvests $200 in the risk-free asset, $300 in Home Depot, and , $500 in Pfizer d. Ginvests $800 in the risk-free asset, $125 in Home Depot, and $75 in Pfizer. Sinvests $800 in the risk-free asset, $75 in Home Depot, and , $125 in Pfizer
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