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Suppose investor s a t i s f a c t i o n with a portfolio increases with expected return and decreases with
Suppose investor with a portfolio increases with expected return and decreases
with variance according the following formula:
Investment Expected Return, Standard Deviation,
Based the formula for investor satisfaction which investment would youselect you were risk averse with
Which investment would you select you were risk neutral, with
The coefficient the utility formula represents
investor return requirement.
investor aversion risk.
preference for one unit return per four units risk
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