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The expected return of the market portfolio is 8% and the risk-free rate is 1%. A government employee with an estimated human capital of $1.5
The expected return of the market portfolio is 8% and the risk-free rate is 1%. A government employee with an estimated human capital of $1.5 million, owns $2 million of financial assets. How much of her financial wealth should be invested in stocks if her risk aversion parameter A is 6.
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