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You manage a risky portfolio with expected rate of return of 16% and a standard deviation of 28%. The T-bill rate is 3%. Suppose that

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You manage a risky portfolio with expected rate of return of 16% and a standard deviation of 28%. The T-bill rate is 3%. Suppose that your client feels that the most she can invest in your portfolio is 60% of her portfolio and she will place the other 40% in a risk-free investment (T-bill). Given this choice, what would be the client's degree of risk aversion, A? 2.51 2.76 2.37 2.44 You have found a mutual fund that you like and want to analyze the fee structure. The fund has class A and class B shares. Class A shares have a 4% front load, no back load, and 0.25% annual 12b-1 fees. Class B shares have no front load, a 5% back load that falls by 1% for each full year invested and has a 0.50% annual 12b-1 fee. You anticipate that the fund will return 12% per year after other fees not mentioned above (e.g. mgt fees) and plan to invest $10,000. After four full years (just beginning year 5) which of these two share classes would you prefer? B, because it will be $178.64 higher B, because it will be $195.74 higher B, because it will be $323.89 higher B, because it will be $330.16 higher

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