Will sellr 6. Suppose the utility is U- E(r) -0.5Ao2 for all the questions im an standard deviation risk sider a portfolio that offers an expected rate of return of 15% and a of 30%. T-bills offer a risk-free 10% rate of return. What is aversion for which the risky portfolio the maximum level of is still preferred to bills? 7. Suppose you are given the following information regarding several investments: Utility Formula Data Investment Bxpected Return E) Standard Deviation .12 .15 21 .24 30 .50 .16 .21 U E(r)-A n the basis of the utility formula above, which investment would you select if you were risk averse with A 4? (a) O (b) On the basis of the utility formula above, which investment would you select if yo (c) The variable (A) in the utility formula represents the: were risk neutral? a. investor's return requirement. b. investor's aversion to risk. c. certainty equivalent rate of the portfolio. d. preference for one unit of return per four units of risk