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You received no credit for this question in the previous attempt. Problem 6-12 Consider historical data showing that the average annual rate of return on
You received no credit for this question in the previous attempt. Problem 6-12 Consider historical data showing that the average annual rate of return on the S&P 500 portfolio over the past 85 years has averaged roughly 8% more than the Treasury bill return and that the S&P 500 standard deviation has been about 35% per year. Assume these values are representative of investors' expectations for future performance and that the current T-bill rate is 3%. Calculate the utility levels of each portfolio for an investor with A= 3. Assume the utility function is U= R-0.5 x Ao?. (Negative amounts should be indicated by a minus sign. Do not round intermediate celculations. Round your answers to 4 decimal places.) ces U(A = 3) Windex WBills ........ 1.0 0.0 0.8 0.2 0.6 0.4 0.4 0,6 0.2 0.8 1.0 0.0
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