# Question: Calculate the utility levels of each portfolio of problem 7

Calculate the utility levels of each portfolio of problem 7 for an investor with A = 3. What do you conclude?

In Problem 7

Wbills Wmarket

0............ 1.0

.2......... .8

.4......... .6

.6......... .4

.8......... .2

1.0......... 0

In Problem 7

Wbills Wmarket

0............ 1.0

.2......... .8

.4......... .6

.6......... .4

.8......... .2

1.0......... 0

**View Solution:**## Answer to relevant Questions

Repeat problem 8 for an investor with A = 5. What do you conclude? You manage a risky portfolio with an expected rate of return of 18 percent and a standard deviation of 28 percent. The T-bill rate is 8 percent. Compute the estimated three-year risk premiums, SDs, and Sharpe ratios of the two portfolios. What is the beta of a portfolio with E( rp) = 18 percent, if rf = 6 percent and E( rM) =14 percent? Within the context of the capital asset pricing model (CAPM), assume: • Expected return on the market = 15 percent • Risk- free rate = 8 percent • Expected rate of return on XYZ security = 17 percent • Beta of ...Examine the figure85 that follows, which presents cumulative abnormal returns both before and after dates on which insiders buy or sell shares in their firms. How do you interpret it? What are we to make of the pattern of ...Post your question