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You have $1,000 and you are thinking about how to invest it. You will choose between the risk-free Treasury-bill and a stock. The expected return
You have $1,000 and you are thinking about how to invest it. You will choose between the risk-free Treasury-bill and a stock. The expected return for the stock is 15% and its standard deviation is 30%. The risk-free rate is 5%. Assume your risk aversion coefficient is 3. How much should you invest in this stock?
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