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Your degree of risk aversion (A) is 3.7. The risky portfolio's expected return is 12.6%, while the risk-free rate is 1.5%. The risky portfolio has
Your degree of risk aversion (A) is 3.7. The risky portfolio's expected return is 12.6%, while the risk-free rate is 1.5%. The risky portfolio has a volatility of 25%. You won $6,000 at the lottery and you want to invest the whole amount. How much should you invest in the risky portfolio if you want to respect your degree of risk aversion?
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