A portfolio has an expected rate of return of 0.15 and a standard deviation of 0.15.The risk-free rate is 6 percent.An investor has the following utility function: U = E(r)- (A/2)s².Which value of A makes this investor indifferent between the risky portfolio and the risk-free asset? A)5 B)6 C)7 D)8 E)none of the above

Question

Quizplus · Accepted Answer

The Answer of A portfolio has an expected rate of return of 0.15 and a standard deviation of 0.15.The risk-free rate is 6 percent.An investor has the following utility function: U = E(r)- (A/2)s².Which value of A makes this investor indifferent between the risky portfolio and the risk-free asset? A)5 B)6 C)7 D)8 E)none of the above

A Portfolio Has an Expected Rate of Return of 0