The market portfolio represented by the S&P 500 has a 12% expected return & 20% risk. The risk-free rate = 5% & the investors risk
The market portfolio represented by the S&P 500 has a 12% expected return & 20% risk. The risk-free rate = 5% & the investor’s risk aversion coefficient A = 2.5.
Use Excel to plot the CAL and the indifference curve. Attach the Excel file to your submission in Canvas. Identify the optimal compete portfolio on the graph.
Hint: There are several steps to solving this, which should be done in Excel. First find the utility of the optimal complete portfolio.
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Authors: Scott Besley, Eugene F. Brigham
6th edition
9781305178045, 1285429648, 1305178041, 978-1285429649
