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Your degree of risk aversion (A) is 1.8. The risky asset's expected return is 14.6%, while the risk-free rate is 2.3%. The risky asset has
Your degree of risk aversion (A) is 1.8. The risky asset's expected return is 14.6%, while the risk-free rate is 2.3%. The risky asset has a volatility of 19%. You have $8,000 to invest. How much (in $) should you invest in the risky portfolio if you want to respect your degree of risk aversion?
Hint: First find the % you should invest, then use the % to find the amount of money.
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