The 60 year old group is indifferent between investing all of their assets in either the risk-free asset (given an interest rate of 1.5%) or in the stock market (the market has a risk premium of 6.35% and a standard deviation of 17.6%).

• Use this calculation to estimate the risk aversion (A) of the 60 year old group. Assume that our investors have utility preferences expressed as = () 0.5A(standard deviation)^2.