Question: 8. If an investors utility function is expressed as U = E(r ) _12 A 2 and the measure for risk aversion has

8. If an investor’s utility function is expressed as U = E(r ) − _12 A σ 2 and the measure for risk aversion has a value of 2, the risk-averse investor is most likely to choose:

A. Investment 1.

B. Investment 2.

C. Investment 3.

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